Bitcoin-backed Wrapped Bitcoin (WBTC) tokens have been buying and selling at a reduction in comparison with their Bitcoin backing ever because the fall of main crypto change FTX.
Market knowledge supplied by Executed reveals that Wrapped Bitcoin has been constantly buying and selling at a reduction in comparison with the worth of the underlying Bitcoin ever because the fall of main crypto change FTX. WBTC’s worth broke below the complete worth of a Bitcoin on Nov. 12 and its worth in comparison with Bitcoin has seen a pointy enhance in volatility ever since.
WBTC has reached its peak low cost in comparison with Bitcoin on Nov. 26, when it was price practically 1% lower than Bitcoin regardless of its supposed one-to-one BTC backing. As of press time, WBTC is buying and selling at a 0.19% low cost in comparison with the underlying Bitcoin.
One doable motive for this low cost is that the autumn of FTX generated a big — and wholesome — diploma of mistrust in direction of custodial options that resulted in a big enhance within the WBTC promoting strain. This concept is additional backed by Messari knowledge displaying an 8.82% lower in WBTC provide from 238,000 on Nov. 12 right down to 217,000 as of press time.
extra knowledge reveals that the function of FTX’s chapter — which additionally introduced down its sister funding agency Alameda Analysis down with it — is far more direct than simply inflicting panic. Dune knowledge reveals that Alameda analysis is each the highest WBTC minter and burner, which means that the bankrupt establishment created extra and destroyed extra Wrapped Bitcoin than some other entity.
Alameda Analysis minted 101,746 WBTC and burned 29,435 WBTC to withdraw the underlying BTC — exercising unfavorable market strain on each WBTC and Bitcoin. Moreover, Alameda Analysis additionally has 72,310 WBTC to burn and — consequently — Bitcoin to promote whereas making an attempt to recuperate belongings to repay its collectors.