What is Wrapped Bitcoin? WBTC price prediction

  • What is Wrapped Bitcoin? WBTC price prediction

    You may be curious about a Cryptocurrency token called Wrapped Bitcoin which in the ticker is WBTC. It is indeed one of the newer cryptocurrencies, but it is rapidly gaining ground and at press time, the token is ranked twentieth on the rating site Coinmarketcap.

    At this time the WBTC has reached a market capitalization of more than 1 billion dollars with the number of tokens in circulation 105,132 WBTC.

    If you are still curious about this WBTC, this article is a collection of information related to Wrapped Bitcoin which has been compiled from several sources.

    Wrapped Bitcoin Explained

    Wrapped Bitcoin (WBTC) is an ERC-20 token issued on the Ethereum blockchain to represent Bitcoin (BTC).

    This means that the price of 1 unit of WBTC is always proportional to the price of 1 unit of BTC, with a 1: 1 ratio.

    WBTC was first launched in January 2019 with the aim of increasing the liquidity of Bitcoin.

    Unlike TRON, which is made by individuals, WBTC is designed from a collaboration between several companies namely BitGo, Kyber Network, and Republic Protocol.

    Besides that, other new supporters emerged, such as MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol, Prycto, RadarRelay, Blockfolio, and Gnosis.

    The company is in a system that can ensure that the underlying asset of WBTC, namely BTC, is guaranteed according to the smart contract written on the Ethereum blockchain.

    They also ensure the smooth process of issuing and burning WBTC tokens in accordance with the use of Bitcoin on the Bitcoin blockchain. Again, this corresponds to the WBTC smart contract itself.

    Why Wrapped Bitcoin?

    The popularity of Decentralized Finance (Defi) is the main factor why WBTC survives while maintaining the value of Bitcoin (BTC) itself.

    The first and foremost note here is that through WBTC, "BTC indirectly" is easier to use as collateral to get DAI stablecoin or the like in a number of Defi (for example in Maker DAO).

    The reason is that transfer time and fees are much more efficient on the Ethereum blockchain, compared to directly using the Bitcoin blockchain itself. It's known, most Defi does use the advantages of smart contracts on the Ethereum blockchain as the medium.

    How does Wrapped Bitcoin Work

    In the WBTC transaction process, there are three main actors, namely users, merchant, and custodians.

    To get WBTC the first step is the user submits a request to the WBTC’s merchant..

    Merchant then distributes the WBTC in exchange for bitcoin or vice versa.

    The merchant serves as an intermediary between the user and the custodian, which is the liquidity pool of the network.

    After the merchant submits a transaction request to the custodian, the custodian will then grant or reject the request to create or burn the WBTC.

    The process of printing and burning occurs through an exchange of atoms, directly between merhcant and custodians.

    The process occurs when a merchant enters a request to create WBTC via an Ethereum smart contract while sending bitcoin to a custodian.

    Furthermore, in this process, the custodian waits for confirmation on the Bitcoin blockchain before approving requests on the Ethereum network. If this process is complete then the merchant gets WBTC.

    In order for users to get their tokens, they have to log on to a trusted exchange or atomic exchange with merchant..

    Once users get their hands on their WBTC, all they have is basically bitcoins "wrapped" in the Ethereum blanket. Hence, the name "Wrapped Bitcoin".

    Wrapped Bitcoin VS Bitcoin

    WBTC is Bitcoin wrapped, compared to native Bitcoin, WBTC allows more risk because they use third-party intermediaries, in this case, are traders and custodians.

    Although the value of Bitcoin itself always fluctuates, the value of 1 WBTC is equal to 1BTC.

    By using WBTC users get the freedom to explore other blockchains.

    If you are using BTC you may find it difficult to support Dapps, this is because most of the Defi (and DApps) ecosystem uses the Ethereum network rather than the Bitcoin blockchain.

    So that in order to be involved in it, users must buy other tokens such as Ethereum.

    ‍But that problem has been resolved by WBTC.network which was launched in January 2019, as a result of which many Defi protocols - including MakerDAO, Dharma, Compound, and the Kyber Network - then allow borrowers to use WBTC as collateral.

    These can then be locked into smart contracts, with crypto loans typically paid out using DAI stablecoin in the Ethereum ecosystem.

    In this case, the WBTC DAO is overseeing the Wrapped Bitcoin project. DAO stands for Decentralized Autonomous Organization.

    Wrapped Bitcoin Mining

    In printing new WBTC tokens, by doing a process called minting. This process will generate a new wrapped token which is carried out by the custodian, first through the merchant.

    The Merchant will initiate the transaction by authorizing the custodian to print the WBTC to the user's address on Ethereum.

    In this process, the Merchant sends native BTC to the custodian.

    Furthermore, the custodian will wait for 6 block confirmations on Bitcoin. When this process is completed the custodian then makes a transaction on Ethereum to print a new WBTC equivalent to the Bitcoin that was sent.

    Then the user on Ethereum requests a wrapped token from the merchant.

    However, users must complete the KYC procedure (know your customer) and AML (anti-money laundering).

    Once the requirements are met both the merchant will get Bitcoin and the user get the WBTC.

    Burn WBTC

    The process of burning WBTC occurs because users exchange WBTC for BTC. This only is done through verified merchants.

    In the first step, the user creates a "burn" transaction via a smart contract with an amount equal to the number of WBTC tokens to be burned.

    This process requires 25 block confirmations on Ethereum, if it has been fulfilled then the WBTC is deducted from the merchant's WBTC balance and the custodian releases the BTC amount to the BTC Merchant's address.

    It also requires KYC and AML requirements before BTC is given to the Merchant's address.

    Is Wrapped Bitcoin a good investment?

    WBTC's market capitalization can be said to be rapidly increasing, previously it was in the 20th position, now it has been in the 19th position with a price of $ 11,680.34. Is this a good signal to buy WBTC for now?

    Bitcoin tokenization or wrapped Bitcoin can become a hedge, with the growing liquidity on the Ethereum network, this has succeeded in increasing the demand for Bitcoin wrapped which currently has reached 105,686 WBTC.

    According to Cointobuy, that the WBTC through an algorithmic calculation using the data of the past six months is wavy, this can be a profitable asset in the future The reason is Defi's growth on the Ethereum network which has experienced a rapid increase.

    Besides these opportunities, you can also take advantage of the difference in price in the market to get arbitrage opportunities.

    WBTC can be an asset in search of arbitrage opportunities, with Bitcoin dealing a major blow in terms of price value.

    With the increase in the money circulating on the Defi platform, the volatility of the selling and buying actions is stronger.

    But however this may also be risky, investors will have to pay higher interest rates on bitcoin liquidity to cover the risk of losing assets in addition to gaining exposure to the liquidity of the first cryptocurrency.

    Wrapped Bitcoin price prediction

    WBTC is one of the assets being hunted, for now, the extraordinary increase gives hope that this is a profitable asset for the future.

    With a value pegged at 1: 1 against Bitcoin, this is an attractive investment alternative, although the value of Bitcoin itself fluctuates against the USD.

    The following forecasting sites may increase your confidence in the future of WBTC.

    Wallet investor WBTC price prediction 

    Wallet investors try to translate future prices by calculating past data using smart algorithms and the result is that for the next one year the WBTC is expected to rise to $ 13703.60 by 2021, and by 2025 it is predicted to reach $ 22609.10

    Short term price prediction

    The short-term forecast for the WBTC is trending up, with a low of $ 10,500 and a high of $ 12,050.


    Source wallet investor.

    Long term price prediction

    Meanwhile, long-term predictions also indicate a bullish trend. Where the price can reach the level of $ 14,000

    Source wallet investor

    Gov Capital WBTC price prediction

    Gov Capital is one of the forecasting sites which claims to have more than 70% accuracy predicting WBTC in 2021 October 20 next year, one year from now it is predicted that prices will increase by 74,804% and reach a price of $ 35857,622147.

    While the 2022 December prediction price is expected to reach $ 68425.64, the 2023 December prediction reaches $ 100 000.00, the 2024 forecast is the same at a price of $ 100 000.00, and the 2025 prediction at a price of $ 100 000.00.

    Short term price prediction

    Gov Capital also predicts that short-term prices will experience an increase in a bullish market trend by reaching the price level of $ 12,000 at the beginning of October 2020. The lowest price is marked at $ 10 500.

    Source Gov Capital

    Long term price prediction

    Long-term price prediction in the next year, by Gov Capital predicts a low of $ 4,000 while a high of $ 20,000 is predicted to occur in October 2021, and in early January 2022, it is estimated at $ 11769.



    Source Gov capital.

    Digitalcoin WBTC price prediction

    Digitalcoin has predicted a WBTC price by the end of 2020 at $ 20,391.66, a prediction of 2021 at $ 24,910.34, a prediction of 2022 at $ 27,861.17, a prediction of 2023 at $ 36,621.30, a prediction of 2024 at $ 40,825.24, a prediction of 2025 at $ 41,012.84, and a prediction of 2026 at $ 54,644.47.

    The future low of the WBTC is predicted at $ 49,100.87, and the high is predicted at $ 58,488.40.

    Based on forecast value statistics, WBTC is an asset that has increased in value from time to time with significant growth.

    Source Digitalcoin.

    AK crypto WBTC price prediction

    Ak crypto under Cryptocurrencypriceprediction.com is a forecast site on various cryptocurrencies.

    His prediction for WBTC is expected December 2020 at $ 14,875.85, December 2021 prediction at $ 27,174.79, December 2022 prediction $ 32,211.49, December 2025 prediction at $ 110,456.14, December 2030 prediction at $ 177,104.65

    Based on the forecast value statistical data by AK crypto, it can be concluded that WBTC in the future will experience a significant increase in value, if this forecast has good accuracy if now WBTC investment in the next six years will get high gains.

    Wrapped Bitcoin short term analysis 20 October 2020

    WBTC at the time of the press has reached a market capitalization of $ 1,245,914,578 with a daily volume of nearly $ 34 million, with today's increase of 2.53%.

    This market capitalization has increased sharply since July 2020, which is extraordinary, increased because it includes newly launched tokens, but managed to dominate the cryptocurrency market. Even though it is currently ranked 19th, it is still possible in the near future to break through the top ten rankings.

    Source Coinmarketcap.

    If using the Tradingview chart on the Bittrex exchange, we can see a pattern that is formed in 4H, where the price sometimes spikes, which is marked by a long tail on the candlestick.

    Because it may be new, in the daily timeframe display the shape of the candlesticks is less clear so that only parallel candlesticks with small bodies can be seen.

    Source Tradingview 4H.

    From the image above we can see that the price is currently in the upper band area, where the Bollinger band functions as a measure of volatility. So that from the picture above the volatility has decreased slightly.

    Flag pattern appears after rising prices touch the upper band, watch out for the decline with the medium band target at $ 11702. The next downside target is the lower band at the price level of $ 11230.

    Meanwhile, based the MACD line and signal line gives a bullish indication, and RSI level 59 is a bullish area but be alert of a downside reversal.

    Conclusion

    WBTC is bitcoin wrapped on the Ethereum platform, according to Ambcrypto, it has reached a new high of 33,762 WBTC is locked in Defi or the equivalent of $ 400 million.

    This increase has implications for Bitcoin as well as the absorption of flat money into the Defi platform.

    The impact can cause Bitcoin to surge because basically, WBTC is Bitcoin that is on the Ethereum network.

    One reason for improving WBTC is that it has support from BitGo, according to Ambcrypto, BitGo in the latest news has held WBTC in custody and will adopt Chainlink's new Proof of Reserve for the automated WBTC audit process.

    Of course, this increase will add value to WBTC's future growth.