What is Wrapped Bitcoin (WBTC) and why should you be interested?
Wrapped Bitcoin (WBTC) is an ERC-20 token representing Bitcoin that can be exchanged for BTC on a 1:1 basis. The digital resource was created to allow Ethereum developers to use Bitcoin in the blockchain (Ethereum). In doing so, it combines the best of both networks, the liquidity of BTC and the decentralized application support of Ethereum.
Wrapped Bitcoin was launched in 2019 as a joint project of major blockchains, including MakerDAO and Compound. The forked blockchain works by fixing the original token, BTC, in a digital vault and minting a new one, WBTC, on Ethereum. The feature is enabled using a model of custodians, merchants, end users and the WBTC DAO.
The reason you should be interested in Wrapped Bitcoin is because of its importance in the crypto space. It solves the biggest challenge in the sector – interoperability. The current landscape of blockchain technology is characterized by independent projects with different functions.
Although it preserves the security of individual networks, it prevents communication and transfer of assets. WBTC bridges this important gap, although it uses a different security model than bitcoin. The model is referred to as proof of reserves. Still with WBTCone gets a fixed interest income from lending BTC tokens as DeFi security.
WBTC faces resistance amid bullish momentum
Technically, the WBTC price moves in the same way as BTC, making it an option for investors searching for tokens related to the latter. At the time of writing, WBTC was trading at $20,209, 7% higher in the last week.
Source: TradingView
The daily technical outlook shows that WBTC found resistance at $20,959 and is currently on a retracement. The MACD momentum indicator confirms bullish momentum, while the Stochastic Oscillator is slightly below the overbought zone.
Should you buy WBTC?
The fundamental side of things is promising for Wrapped Bitcoin because of the use cases in DeFi. Technically, however, the price has returned to the immediate support. However, the cryptocurrency can be affected by macro developments, just like BTC.
Where to buy WBTC
Binance
Binance is one of the largest cryptocurrency exchanges in the world. It is better suited for more experienced investors and it offers a large number of cryptocurrencies to choose from, to over 600. Binance is also known for having low trading fees and a variety of trading options that users can take advantage of, such as; peer-to-peer trading, margin trading and spot trading.
Buy WBTC with Binance today
KuCoin
Kucoin is a cryptocurrency exchange that offers over 200 cryptocurrencies. Kucoin has a wide range of services, such as; a built-in peer-to-peer exchange, spot and margin trading, bank-level security and a wide range of accepted payment methods. Users can benefit from a beginner-friendly interface and relatively low fees.
Buy WBTC with KuCoin today
