wrapped bitcoin (WBTC) is an ERC-20 token that represents Bitcoin and can be exchanged 1-for-1 with BTC. Digital Assets was created to allow Ethereum developers to use Bitcoin on the blockchain (Ethereum). In doing so, it combines the best of both networks: BTC’s liquidity and Ethereum’s decentralized application support.
Wrapped Bitcoin started in 2019 as a collaborative project of major blockchains such as MakerDAO and Compound. A forked blockchain works by locking the original token, BTC, in a digital vault and creating a new token, WBTC, on Ethereum. This functionality is enabled with the help of models for custodians, merchants, end users, and the WBTC DAO.
The reason you should be interested in wrapped Bitcoin is due to its importance in the crypto space. It addresses the biggest challenge in this area: interoperability. The current state of blockchain technology is characterized by independent projects with different functions.
Individual networks remain secure, but communication and asset transfers are impeded. WBTC uses a different security model than Bitcoin, but fills this important gap. The model is called Proof of Reserves. Nevertheless, WBTCEarn fixed interest income by lending BTC tokens as DeFi collateral.
WBTC Meets Resistance Amid Bullish Momentum
Technically, the price of WBTC fluctuates similarly to the price of BTC, making it an option for investors looking for tokens related to BTC. As of this writing, WBTC is trading at $20,209, up 7% over the past week.
Source: Trading View
The daily technical outlook shows that the WBTC has found resistance at $20,959 and is currently in a retracement. The MACD Momentum indicator confirms the bullish momentum while the Stochastic Oscillator is just below the overbought zone.
Should I buy WBTC?
The underlying aspects of Wrapped Bitcoin are promising due to its use case in DeFi. However, technically, the price has receded to the most recent support. However, cryptocurrencies, like BTC, can be affected by macro developments.
Where to buy WBTC
Binance is one of the largest cryptocurrency exchanges in the world. Suitable for more experienced investors, with over 600 cryptocurrencies to choose from. Binance is also known for its low transaction fees and multiple trading options that users can benefit from. Peer-to-peer trading, margin trading, spot trading.
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Kucoin is a cryptocurrency exchange that offers over 200 cryptocurrencies. Kucoin has a wide range of services including: Built-in peer-to-peer exchanges, spot and margin trading, bank-level security, and a variety of payment methods are available. Users can benefit from a beginner-friendly interface and relatively low fees.
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