Declining But Dominant: WBTC Maintains Market Lead Over BTCB, RBTC, LBTC, and Other Derivatives

The Wrapped Bitcoin (WBTC) protocol, initiated by Bitgo in 2019, holds the title of the largest BTC derivative project by market capitalization, and to date, no other project has exceeded its scale. Nonetheless, the past few years have seen a significant decline in the number of wrapped bitcoins in circulation, with more than 32% of its supply being redeemed since November 2021.

WBTC Retains Top Spot in Bitcoin Derivatives Despite Falling Supply

According to the cryptocurrency market aggregator coingecko.com, wrapped bitcoin (WBTC) ranks as the 15th largest crypto asset by market valuation. Currently, the market cap of WBTC stands at $10.5 billion, with the ERC20 token registering $91.32 million in global trade volume over the past 24 hours. WBTC debuted on Ethereum in January 2019, and each coin is backed 1:1 by bitcoin (BTC). This structure allows users to utilize BTC on the Ethereum blockchain and within decentralized finance (defi) applications.

Bitgo acts as the custodian for the BTC backing the units, and by 2021, the supply of WBTC had crossed the 200,000 mark. As of Nov. 5, 2021, about 231,659 WBTC were in circulation. This weekend, the count stands at 155,849 WBTC, indicating that 75,810 coins have been redeemed over the past few years. The downward trend has persisted recently, as the number of wrapped bitcoins dropped to 161,572 by Nov. 27, 2023, with 5,723 tokens redeemed in that period.

Despite these reductions, WBTC remains the largest BTC derivative project. The nearest competitor is Binance‘s BTCB, which has a circulating supply of 57,192 BTCB and a current market cap of $3.86 billion. Blockstream’s sidechain Liquid features a derivative bitcoin known as LBTC, with 3,865.94 LBTC in circulation this weekend. Avalanche‘s BTC derivative, BTCb, totals 3,544.80 BTCb on the AVAX chain, and RSK’s sidechain has 2,897 RBTC circulating today.

In terms of market activity, WBTC outpaces its competitors. Binance‘s BTCB is the second most active, seeing $9.85 million in trade volume over the last 24 hours. Liquid’s BTC derivative has not recorded any global trade volume, while RSKs RBTC registered trades worth $291,231 during the same period. As the development of layer twos (L2s) accelerates, more BTC derivatives are emerging to challenge both established and new contenders, while WBTC maintains its significant market presence.