Market
Will It Overtake WBTC in DeFi?
Coinbase’s Wrapped Bitcoin (cbBTC) has soared to a $1 billion market cap in just 57 days since its launch.
This growth trajectory effectively represents almost 10% of the Wrapped Bitcoin (WBTC) market cap, which currently sits at $12.88 billion, according to CoinMarketCap.
Coinbase’s cbBTC At $1 Billion Market Cap
Data on Dune shows the cbBTC Bitcoin wrapper has a market capitalization of $1.04 billion as of this writing. The majority of this value is held on Ethereum at $855.43 million, followed by Base Layer-2 blockchain and finally Solana.
Specifically, out of a total cbBTC supply of 14,678.95, over 12,000 are held on Ethereum. Meanwhile, Base and Solana hold 2,388 and 262 tokens, respectively.
As a Bitcoin wrapper, cbBTC allows BTC to be represented on other blockchain networks. Its rise highlights an important trend: Ethereum-based assets experience faster net supply changes than other leading Bitcoin liquid staking tokens (LSTs). These include eBTC, solvBTC, BBN, and pumpBTC, among others.
“The network effect is unbeatable. They can offer rebate/discount/businesses for MMs/Funds in their diversified line of business to bootstrap liquidity, adoption very easily,” said Tom Wan, an on-chain data researcher.
This swift growth, occurring just over two months after launch, signifies a notable demand for Coinbase’s wrapped Bitcoin product. The pace also reflects an escalating preference for cross-chain compatibility within decentralized finance (DeFi).
It comes as users and protocols look for more accessible and flexible Bitcoin-pegged assets. Coinbase first revealed cbBTC’s planned debut on Base in mid-August.
The product inadvertently presented as a prospective market rival to Wrapped Bitcoin (WBTC). The Bitcoin wrapper has also seen increased support and interest across decentralized finance (DeFi).
The idea of a Bitcoin wrapper is to expand users’ access to BTC. For instance, with cbBTC on Solana, holders can leverage the network’s reduced fees and high transaction speeds.
These metrics are especially relevant for high-frequency DeFi transactions. Aave, a leading DeFi protocol, is already targeting cbBTC for its V3 Protocol.
At inception, cbBTC drew attention from venture capitalists like Dan Elitzer. In August, the VC predicted that cbBTC would be “super strategic” for Coinbase. He also said it could outpace WBTC’s supply within six months.
“Frankly, I’m surprised they didn’t ship this years ago,” Elitzer remarked.
Elitzer also emphasized that cbBTC’s introduction could encourage DeFi users to seek more decentralized Bitcoin-wrapped options, given the “mishandling” of WBTC by Justin Sun-affiliated management.
Controversy Surrounding Coinbase’s PoR for cbBTC
Indeed, Coinbase’s cbBTC’s advent came against the backdrop of the WBTC controversy involving Justin Sun. WBTC, once the go-to solution for wrapped Bitcoin on Ethereum, has faced growing skepticism due to concerns over its management and transparency under Justin Sun’s influence.
The rapid rise of cbBTC has not been without controversy. Coinbase’s approach to transparency and Proof of Reserves (PoR) has invited scrutiny. Critics, in particular, remain a bone of contention.
Duo Nine, a popular user on X, warned that Coinbase’s reliance on users’ trust without providing concrete proof of BTC reserves could lead to a collapse similar to the FTX downfall. This outcome, he articulated, was contingent on Coinbase minting more cbBTC than it could back.
“They will not provide any proof of reserves for the BTC they *claim* they have, nor any proof of backing for their new paper BTC called cbBTC. If they print too much paper BTC they will go the FTX route,” Duo Nine said.
Justin Sun echoed the sentiment, raising questions regarding Coinbase’s decision to forgo standard reserve audits for cbBTC. The Tron executive argued that this lack of transparency introduces significant risk. Against such fears, Coinbase’s custodial practices came into question, prompting BlackRock to revise its custody agreement with the exchange.
This unease may have steered users towards alternatives like cbBTC, which some see as a “safer” wrapped Bitcoin option with Coinbase’s backing. As cbBTC attracts more support, it poses an increasing threat to WBTC’s long-standing dominance. Whether cbBTC will eventually surpass WBTC remains to be seen, but its rapid growth signals a significant shift in user preferences within DeFi.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
Is the XRP Price Decline Going To Continue?
Ripple’s XRP hit a year-to-date high of $1.63 on November 23. However, fading bullish momentum has made future traders doubtful about the rally’s sustainability. An increasing number are opening short positions, expecting a near-term price correction.
Currently trading at $1.44, XRP has declined by 6% in the past 24 hours. This analysis explores the recent activity in the token’s futures market and assesses the likelihood of a continued XRP price decline.
Ripple Traders Bet on a Price Drop
A drop in its open interest has accompanied XRP’s price decline over the past 24 hours. Per Coinglass data, this sits at $2.52 billion, falling by 9% during that period.
Open interest refers to the total number of active contracts in a derivatives market, such as futures or options, that have not been settled. When open interest drops as an asset’s price falls, traders are closing their positions to lock in profits or minimize losses, indicating reduced market participation.
In XRP’s case, this suggests waning confidence in the continuation of the uptrend and hints at a sustained reversal in the asset’s price movement.
Moreover, XRP’s Long/Short ratio confirms this bearish outlook. As of this writing, this sits at 0.96%, with 51% of all positions opened shorting the altcoin.
The Long/Short ratio measures the proportion of long positions (bets on price increases) to short positions (bets on price decreases) in a market. When the ratio is below 1, it indicates that there are more short positions than long positions, suggesting a bearish sentiment among traders.
This imbalance in the XRP market reflects growing pessimism about the asset’s near-term prospects and may contribute to continued downward pressure on its price.
XRP Price Prediction: More Declines Imminent
XRP is currently trading at $1.44, holding above the $1.33 support level. If bearish sentiment intensifies, the price could drop to this support. A further decrease in buying pressure at that level may push XRP down to $1.15.
On the other hand, a shift in market sentiment from negative to positive will invalidate this bearish outlook. Should this happen, the altcoin will reclaim its year-to-date high of $1.63 and attempt to surpass it.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
Winklevoss Urges Scrutiny of FTX and SBF Political Donations
Gemini co-founder Cameron Winklevoss has called for a renewed investigation into the dropped campaign finance charges against Sam Bankman-Fried, the convicted founder of the now-defunct FTX exchange.
Winklevoss emphasized the need for the incoming US Attorney General to address unresolved concerns about how these charges, tied to election interference involving stolen customer funds, were handled.
Winklevoss Demands Probe Into FTX-Linked Election Interference Accusations
In a November 23 post on X, Winklevoss expressed the belief that the campaign finance allegations remain a critical issue. He pointed to the Department of Justice under Merrick Garland, which declined to pursue these charges due to extradition technicalities with the Bahamian government.
According to Winklevoss, the DOJ chose not to work through the required legal processes to include the campaign finance violations in the indictment, leaving the matter unaddressed.
“Merrick Garland’s DOJ refused to pursue campaign finance charges against SBF because they were not included in his extradition…Since when has paperwork stood in between a prosecutor and adding more charges? Especially when it involves election interference with $100m of stolen customer funds,” Winklevoss stated.
Federal prosecutors initially dropped the campaign finance charge last year, attributing their decision to objections from Bahamian authorities. This charge involved over $100 million allegedly funneled from Alameda Research to fund more than 300 political contributions.
According to the indictment, these contributions, often made through straw donors or corporate funds, aimed to enhance Bankman-Fried’s influence in Washington, D.C.
The indictment also noted that Bankman-Fried became a top political donor in the 2022 midterm elections. He allegedly used the funds to gain favor with candidates across party lines, potentially shaping legislation favorable to FTX and the broader crypto industry.
Winklevoss’ remarks come as other key figures in the FTX collapse face their consequences. While Caroline Ellison and Ryan Salame received sentences of two years and 7.5 years, respectively, Gary Wang and Nishad Singh avoided prison by cooperating with prosecutors. Bankman-Fried is currently serving a 25-year prison sentence for fraud and other crimes.
Meanwhile, FTX has announced plans to implement its approved reorganization strategy starting in January. The exchange’s bankruptcy managers have recovered billions of dollars for creditors and are intensifying efforts to reclaim assets held by other entities.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
Why a New Solana All-Time High May Be Near
Solana’s (SOL) price clinched a new all-time high of $264.39 during the trading session on November 23. Its price has since witnessed a 3% correction, causing the popular altcoin to exchange hands at $255.12 as of this writing.
Despite this pullback, the bullish bias toward the altcoin strengthens. An assessment of its daily chart highlights two reasons why a new Solana all-time high may be on the horizon.
Solana Bulls Relegates Its Bears
On the SOL/USD one-day chart, its price is positioned above the green line of its Super Trend indicator. This indicator measures the overall direction and strength of a price trend. It appears as a line on the chart, changing color based on the prevailing trend: green signifies an uptrend, while red indicates a downtrend.
When the Super Trend line is above an asset’s price, it signals a downtrend, suggesting continued bearish momentum. In Solana’s case, when the Super Trend line turns green and moves below the price, buyers are in control.
This green line often acts as a support level, where increased buying pressure can drive a rebound following price dips. For Solana, this support is currently set at $213.53.
Further, the coin’s price rests significantly above its Ichimoku Cloud, confirming this bullish outlook. This indicator tracks the momentum of an asset’s market trends and identifies potential support/resistance levels.
When an asset’s price rests above the Ichimoku Cloud, it signals a bullish trend. It indicates that the asset is on an upward trend with the potential for further gains. In this case, the Cloud is a dynamic support zone below the price, reinforcing bullish sentiment.
SOL Price Prediction: New High on the Horizon
At press time, SOL trades at $255.12, below the new resistance at its all-time high of $264.39. If buying pressure strengthens further, the coin’s price will flip this level into a support floor and attempt to touch a new peak.
On the other hand, if profit-taking activity resurges, SOL’s price will shed some of its current gains to trade at $231.35. Should this level fail to hand, SOL’s price will fall toward the support formed by its Super Trend indicator at $213.53. This will invalidate the possibility of a new Solana all-time high in the near term.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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