Stretched thin? Wrapped Bitcoin assets may encourage supply crisis
In a blog post of Friday, Binance re-introduced BTCB to the world — a wrapped Bitcoin asset intended to bring liquidity from the world's largest cryptocurrency, BTC, to Binance Smart Chain's DeFi (decentralized finance) ecosystem. First announced last year, Binance initially saw wrapped Bitcoin solely as a vehicle for traders to obtain cross-chain asset exposure without leaving BSC.
For instance, WBTC — a wrapped Bitcoin token on Ethereum — has enjoyed massive success since its January 2019 launch: it currently ranks as the #14 cryptocurrency by marketcap, and has found significant adoption in protocols such as Aave and Uniswap, whose contracts both rank among the top-10 holders of WBTC. Particularly if the success of wrapped and cross-chain Bitcoin assets continue to grow, institutions looking to hoover the BTC supply may well be faced with mounting scarcity.