Navigating the Wrapped Bitcoin (WBTC) Landscape: 86,000 WBTC Exits Circulation in One Year

The Wrapped Bitcoin project initially launched as WBTC on the Ethereum blockchain in 2019, now holds the 16th position as the most valuable asset in the cryptocurrency market, boasting a market value of about $4.73 billion. Despite its prominent standing as the leading wrapped bitcoin (BTC) derivative token, there has been a noticeable reduction in circulating coins over the past year.

“🤩 #WrappedBitcoin landscape update: 😱 Over 86000 WBTC vanished from circulation in just one year! 🌪️ The market seems to be tightening its grip on these wrapped tokens. Exciting times ahead! Comment, like, and retweet! 🔄📈 #crypto #bitcoin” pic.twitter.com/CBizAVvMcO

— Cryptonic Daily (@CryptonicDaily) July 29, 2023

Magnitude of WBTC Circulating Supply Reduction

To put this reduction into perspective, on July 13, 2022, the circulating WBTC supply amounted to around 247,832 WBTC. As of the current date, this number has declined to 161,460 WBTC, representing a substantial 34% pullback in circulating supply over the past year. However, despite this decline, The market valuation has witnessed remarkable growth, surging from slightly above $3 billion on January 2, 2023, to an impressive figure of $4.73 billion at present.

Interestingly, while the supply decreased by over 22,000 tokens since January 2, 2023, there was a simultaneous increase of 11,010 WBTC since March 2023. This increase can primarily be attributed to the appreciating price of BTC, which experienced a surge of over 65% since the start of the year, rising from $16,662 per unit to $29,328 per unit.

WBTC’s Utilization and Distribution

As WBTC’s value is pegged to BTC on a 1:1 basis, its market capitalization followed suit, offsetting the circulating supply reduction by 22,088 WBTC during the same period. Hence, of the total 34% reduction in circulation since last year, 12.03% occurred in 2023.
Within the Ethereum network, a total of 74,191 holders currently possess the crypto, with the majority (51.5%) held by the top ten addresses. These ERC20-based WBTC tokens play crucial roles across various decentralized finance (DeFi) platforms like Aave, Compound, and Arbitrum.

Notably, the top 100 Ethereum addresses collectively hold 75.16% of the total supply. Additionally, WBTC finds utility on other blockchains such as Arbitrum, Cronos, Fantom, Polygon, Solana, and Avalanche. The substantial decrease in the circulating supply could have several implications for its price dynamics. The scarcity resulting from the reduced supply may drive increased demand, potentially pushing prices higher.

Moreover, this development could foster positive market sentiment, attracting more interest and investments in the asset. Additionally, market speculation may arise as traders and investors anticipate further price increases. Furthermore, the price movements may correlate with those of Bitcoin, given their 1:1 peg. Lastly, the reduced supply may impact its availability on DeFi platforms.

Key WBTC Levels

At present, the market is in a retracement phase following a year-long bullish trend. The pullbacks have resulted in a bullish Break of Structure (BOS). The faster Moving Averages with periods nine and eighty-one indicate that the retracement is above the daily candles.

Simultaneously, the slower Moving Averages with periods eighty-nine and two hundred remain below the daily candles, reaffirming the overall bullish trend. Moreover, the Stochastic indicator on the daily chart shows an oversold condition, suggesting a potential resumption of the bullish ascent in the near future.

WBTC Key Levels

Demand Levels: 28000.0, 26000.0, 22000.0
Supply Levels: 30000.0, 32000.0, 34000.0

Total Market Capitalization: $1.2T
WBTC Market Capitalization: $4B
WBTC Volume: $148M
WBTC Rank: 15

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