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
Ethereum Whales Fail to Drive Price to $3,500, Drawdown Likely
Ethereum’s recent price movement has shown a decline following a rally, even after ETH Whales made a comeback and Bitcoin reached a new all-time high.
While ETH had gained momentum alongside the broader market surge, this recent drop could hinder a significant shift in Ethereum’s price trajectory, raising questions about its short-term outlook.
Ethereum Whales Aren’t Strong Enough
Ethereum whale activity has spiked, with transaction volume reaching over $13.8 billion, a three-month high. This uptick signals renewed interest from large wallet holders, a group that significantly influences ETH’s price trends. Such whale participation often leads to short-term surges in Ethereum’s value, as witnessed in the recent rally.
Despite the whale-driven increase, Ethereum’s price has faced resistance in maintaining its peak. This pattern reflects a mix of enthusiasm and caution among investors, as the heightened whale activity has yet to propel ETH past critical levels. The surge in whale activity may contribute to Ethereum’s ongoing resilience, but it also reveals the volatility inherent in the current market sentiment.
On the macro side, Ethereum’s momentum is being tested as its EMAs (Exponential Moving Averages) inch closer to forming a Golden Cross. The 50-day EMA nearing a crossover with the 200-day EMA would confirm a Golden Cross, traditionally a bullish signal. However, ETH’s recent price dip may delay this bullish indicator.
The Golden Cross remains a crucial marker for Ethereum’s potential upward momentum, as a successful formation would validate a more sustained uptrend. Until then, the delay may result in more cautious trading as investors await clearer signals that the altcoin’s current trend can turn positive.
ETH Price Prediction: Finding Support
Last week, Ethereum’s price surged by 39%, pushing it above $3,327. Despite this gain, ETH failed to secure $3,327 as a support level, leading to a 6% drop over the last 72 hours. This downturn has pulled Ethereum further from the critical $3,524 resistance.
If the current decline continues, ETH could test the support level at $2,930. This could act as a buffer but might also signal additional downward movement if breached.
However, a reversal fueled by Bitcoin’s ongoing strength could help ETH regain momentum toward $3,327. Turning this level into support would invalidate the bearish outlook and position Ethereum to target $3,524 as the next milestone.
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
Will the Altcoin Season Cycle Begin Soon? Analyst Weighs In
Crypto analyst Miles Deutscher has pointed to a promising technical setup in TOTAL3, fueling speculation that the altcoin season cycle may close. The analyst comments come as the broader crypto market sees a notable bounce, with Bitcoin (BTC) briefly crossing $93,000 and several altcoins showing strong gains.
But how soon could altcoin season actually arrive? This analysis delves into other factors that could either ignite or delay the anticipated rally.
Altcoin Season on Standby, Analyst Says
For context, TOTAL3 is the entire market capitalization of the top 125 cryptocurrencies excluding BTC and Ethereum (ETH). Historically, when this metric rises, it indicates that altcoin season could be on the horizon as long as Bitcoin dominance drops.
Deutscher’s post on X (formerly Twitter) showed the TOTAL3 monthly chart, indicating that it had formed strong support. The post also revealed that the recent rise in altcoin prices has taken the market cap above notable resistance.
“TOTAL3 (altcoin index) monthly chart. Setup looks fantastic, honestly.” Deutscher wrote on X.
While the analyst’s opinion might be valid, one obstacle that could hinder the altcoin season cycle is Bitcoin’s dominance. Bitcoin dominance refers to the ratio of BTC’s market capitalization compared to the total market capitalization of the entire cryptocurrency market.
As of this writing, the BTC.D, as it is popularly known, is 61.33%. This indicates that the number one cryptocurrency still has a strong hold on the market. For alt season to commence, this ratio has to drop, which Deutscher himself admitted on November 12.
“Bitcoin dominance keeps grinding higher. Only when BTC dominance breaks down can a true alt season ignite.” The analyst emphasized.
Altcoins Surge Could Be Delayed Until BTC Drops
Currently, Blockchaincenter’s altcoin season index, which measures whether the market is in an alt season, has dropped one place to 29. About one week ago, the reading was 30. For confirmation, at least 75% of the top 50 cryptos need to outperform BTC.
Despite this uptick, the index remains well below the 75 threshold, as only 16 of the top cryptocurrencies have outpaced Bitcoin over the past 90 days.
Should that remain the case, then Bitcoin’s price might climb to a higher value before most altcoins hit new highs. However, if BTC experiences a double-digit correction, this could give way for alts to thrive. If that happens, then alt season can officially begin.
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
Why the Aptos Token Price May Struggle to Recover
Yesterday, the world’s largest asset manager, Blackrock, disclosed that it had expanded its tokenized money fund to other blockchains, including Move-programmed Apots (APT). This development sparked speculation that the Aptos token price could gain from it.
Initially, APT price climbed to $12.60. But as of this writing, the altcoin has dropped by 6.33%, suggesting that the integration with Blackrock is not enough to keep the price going high.
Aptos Falters Moments After Bullish Announcement
Blackrock’s announcement, which BeInCrypto reported earlier, coincided with the broader market rally, as the Aptos token price had increased by 21%. However, our finding shows that the drop in Open Interest (OI) was one reason that APT failed to hold on to the $12 mark.
According to Santiment, APT’s OI attempted to approach $200 million on Wednesday, November 13. But it did not and has now dropped to $105.37 million. Open Interest refers to the total number of active contracts in the futures market that have not yet been settled.
An increase in OI indicates more participants are entering the market, potentially strengthening the current trend. Conversely, a decrease in the metric may suggest that the trend is losing momentum.
Therefore, with the metric declining in Aptos’s case, there is a chance that the altcoin’s price might continue to decrease. Additionally, the Chaikin Money Flow (CMF) indicator suggests that Aptos’ price may face challenges in staging a rebound.
For context, the CMF is an indicator developed to track the accumulation and distribution of an asset over a specific period. It ranges from -1 to +1. When the reading rises, it means that accumulation is ongoing, and the price can increase.
However, in APT’s situation, the reading has dropped, suggesting that selling pressure has begun to outpace buying pressure. Should this remain the same, Aptos’ price could slide lower than $11.69.
APT Price Prediction: Sub-$10 Likely
On the daily chart, Aptos faces resistance at $13.72, with support at $10.43, just below the 23.6% Fibonacci retracement level. Given the decline in trading volume, the price of Aptos could continue to slide, and bulls may struggle to maintain support at this level.
This is largely because low trading volume indicates a drop in market interest. As such, it could be challenging for buying pressure to increase. If this is the case, then APT’s price might drop to $9.85.
On the other hand, an increase in buying pressure could invalidate that prediction. Thus, if the accumulation of APT rises, the price might bounce toward $14.13.
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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