Three years ago in 2019, amidst USDT depegging, BitGo CEO Mike Belshe tweeted that “If I were tether / bitfinex, and I believed my own story that every tether is backed by $1, I’d be buying every token I could right now for for $0.978! A risk-free 2% return. Unless I knew it wasn’t actually backed, of course.”
Now over three years after it happened, Tether founder and CEO has replied to the tweet, saying “If I were BitGo, and I believed my own story that every WBTC is backed by 1 BTC, I’d be buying every token I could right now for for $0.98! A risk-free 2% return. Unless I knew it wasn’t actually backed, of course.”
Wrapped bitcoin, a commonly traded clone of the biggest cryptocurrency, has been hit hard by the market contagion caused by the sudden bankruptcy of cryptocurrency exchange FTX. Wrapped Bitcoin (WBTC) is the most popular Bitcoin wrapper on the Ethereum network.
BitGo COO Chen Fang was quick to clarify that every WBTC is 1:1 backed and provable on-chain, putting any skepticism to rest. As far as crypto data provider Kaiko is concerned, the 0.5% discount on WBTC remains unchanged notwithstanding the explanation.
When looking at the quantity of Wrapped Bitcoin tokens generated, it becomes clear that Alameda Research is far and away the leader, having created over 100,000 WBTC.
However, the impending collapse of WBTC is almost certain. As of right now, there are 225,400 WBTC in circulation, and the custodian is holding 228,734 BTC, therefore there is plenty for redemption. Additionally, users may utilize the custodian’s address on the blockchain to confirm that the custodian is really holding the specified amount of Bitcoin. Because the custodian has sufficient Bitcoin to redeem WBTC, a devaluation of WBTC is quite improbable.