- On September 1, Messari’s findings revealed that $500M worth of Bitcoin had been ported over to Ethereum this year.
- Ethereum’s price, topping more than 10% over the last 24-hour trading period and multiplying gains of all almost 300% so far in 2020.
- However, the number of Bitcoin tokens “wrapped” into Ethereum has doubled in August.
The key goal of the Ethereum community is to shift to the Proof-of-Stake model, allowing users to earn rewards for staking their coins and validating transactions, in contrast to mining.
Ethereum’s price, topping more than 10% over the last 24-hour trading period and multiplying gains of all almost 300% so far in 2020, may apparently remain behind the Bitcoin price. However, the number of Bitcoin tokens “wrapped” into Ethereum has doubled in August.
Bitcoin can be wrapped onto the Ethereum Blockchain using a number of Ethereum-based tokens, such as WBTC, which has surged in popularity since May, reveals Dune Analytics. In fact, during some periods in August, more Bitcoin was wrapped onto Ethereum than was created by Bitcoin miners.
On September 1, Messari’s findings revealed that $500M worth of Bitcoin had been ported over to Ethereum this year. With only 0.3% of all Bitcoin on Ethereum and the Decentralized Finance domain witnessing an all-time high growth, the opportunity for decentralized bridges between the two chains is hard to ignore.
Bitcoin bundled on the Ethereum Blockchain using WBTC is actually backed by Bitcoin 1:1 and minted on its Blockchain through locking Bitcoin. By wrapping Bitcoin into Ethereum and synchronising it with smart contracts, crypto investors will benefit from options to unlock such as lending, provision of liquidity and decentralised exchanges.
As per a Glassnode analysis, while this offers more utility post-conversion to the Ethereum Blockchain, its underlying value is based on the 68 terawatt-hours of power that secure the Bitcoin Blockchain each year. It also raises questions on how much Bitcoin has to migrate onto Ethereum before the need for the Bitcoin Blockchain itself starts coming into question.
Thanks to the Decentralized Finance craze taking the crypto-world by storm, Ethereum’s price is now soaring, consolidating its position as the leading altcoin in the current market. The second most popular cryptocurrency is beating Bitcoin by more parameters than one. For instance, a report from the Blockchain analytics website Messari reveals that Ethereum’s active address count has increased by 118% since the turn of the year. In contrast, Bitcoin’s count has increased only by 49%.
DeFi has mainly been responsible for the popularity of Ethereum in recent months, especially with DeFi applications contributing to more than 97% of all decentralized app volume on Ethereum, reports Dapp.com.
Many new investors may be entering the market directly into Ethereum or DeFi protocols, rather than choosing Bitcoin as their only go-to option.