Topic: Wrapped BTC depegged from BTC (Read 206 times)

Did you mean people who want to trade their BTC in decentralized exchange must use WBTC and if they want to trade on centralized exchange they must use BTC? This is really a big misconception since WBTC that traded on Uniswap, Pancakeswap etc aren't really 100% decentralized! Actually the best decentralized exchange is Bisq and you must use BTC to use it, they didn't list centralized scam coin e.g. WBTC. Bisq offer decentralized exchange with high anonymity since you use Tor network.

This is false. There is exactly a 1:1 ratio of wbtc and BTC. What happened was basically it took longer than usually to mint and redeem tokens and it was a little over 24 hours and panic started.

Fud started with the coins linked to alamada and people started to dump wbtc at a loss. Now that the minting is back on, the ratio is pretty much back to normal.

Not only Wrapped BTC but soBTC de-pegs too. Many tokenized BTC token on the market and I really advise people to be aware about risk of buying these tokens which are not real Bitcoin. I fail to understand why people can spend thousands of dollar to buy these tokens but not buy BTC (real Bitcoin, not tokenized Bitcoin).

See the list https://www.coingecko.com/en/categories/tokenized-btc and never touch these tokens is my advice.

This simply means that WBTC reserve fund is not 1:1.  I would convert my WBTC asap If I were you.  I agree with @OP that this is a sign that there is a possibility for WBTC to crash like FTT and Luna.  Why?  Because the fund reserve for WBTC is not enough to cover the WBTC in circulation.  It is better to get out and sell your WBTC than be sorry when people start panicking and a WBTC sell off happen.

I agree that people have way too much trust for wrapped tokens, just like they have on CEX:es. Self custody with native wallets should be the starting point for everyone who enters the crypto scene. However not everyone is that tech-savvy. Many of them struggle even with CEX, but people holding wrapped tokens are important part of crypto growth as they create liquidity in DeFi. Even if you wouldn't like the "IOU" like fundamentals of it, cross-chain liquidity is essential if we are looking any kind of adoption for DeFi

There could be smart traders that can see the opportunity on this but majority of us in here won't look at it when it's started to depegged. If you know how to capitalize and make money from this situation then that's good for you.

You're right and it's no surprise that it's got a high ranking in the market because of it being highly liquid. The difference of its price from an actual btc isn't that much but with the turning of events from projects to exchanges. I think it's note worthy to have that reminder for those that have been keeping it on this chain rather than the actual bitcoin.

Yeah, those are essentials for having wbtc to do things but what I'm trying to say if someone is keeping this just as how we keep bitcoin. Then, it's price might not be par entirely with it sometime in the future and just as the collapsing of many things these days that are in the crypto sphere, we don't that to happen to our funds that we've worked and collected hardly.

There are good points about having it, it's like a gateway for you to trade on different decentralized exchanges and do your strategies there. But looking at what's with it right now, although it's not that really much at all. Still, big things like those collapses came from the little holes that has been probably seen and said before.

Exactly. I think everyone is aware of the things that has come into the market lately. As long as you know what you're doing, and is prepared to any sudden turn of events, you're all good.

I can't agree more. Just be cautious and be aware and it's not yet that much as of now but we don't know if this is going to be bigger soon when it continuous to depeg.

It's not that they are smart, probably it's the greed that taking over most of our traders in today's era. Although we can argue that the market is still fairly young, but I do think that traders that started in 2017 might be very different to traders that recently get into the picture, lets says 2021. So it's hard to compare them as the mindset might be very different already.

As for the de-pegged, if it will continue then for sure going to be very bad for us.

But if this is just for a short period and then they start to pour again to hit 1:1 then good. But we need to be very cautious and careful about WBTC, in my opinion.

I hope so but it seems like people will never learn from the old cases that already happened with various platforms and tokens.


I thought that if people knew it so well. The trend of peg token has started when bitcoin has not yet got any improvement to fix the scalability problem and yeah people were looking an alternative way to send bitcoin with cheap fees and some solutions to create a wrapped tokens were coming in the past but since bitcoin has gone some improvements like LN and then people might not have any reason to keep use wrapped token anymore. They should go to the real BTC instead of fake BTC that claimed backed by real bitcoin.
They were buying it on their own risk. They might never learn until another big incident to happen with it.

I am not sure if this real question, but obviously because people want to use decentralized exchanged to trade it. People who are asking why anyone should use CEX could be asking you that question instead. It was a way to trade cryptos with different blockchains against each other. There's really no perfect system for doing that, as every way has their own downsides.

Just think a little longer because you are proving that the only lazy person is you. You have to have WBTC to:

1- trade BTC without CEX
2- do arbitrage trades between ETH DEXes and every possible CEX
3- do marketmaking and provide liquidity (collect yelld) on uniswap and other dexes

So far there is no decentralized, effectiv, quick and safe way of trading bitcoin and provide liquidity to others without using centralized solutions.

I don't want to be optimistic but Wrapped BTC has a much better stance than some highly liquid stablecoins and some digital exchanges.
The binding ratio is supposed to be 1:1, and therefore this is not supposed to happen, but the difference is not large and it can be subverted.
The most important thing is that the difference does not last for a long time, otherwise it is an indication of manipulation.

So it depegged, and no one is taking advantage,

Seems to me,
The smart traders would unwrap the WBTC and receive the BTC,
then sell the BTC , pocket the profit and then purchase WBTC, and repeat making a profit on the difference with every trade.  

Guess there are no smart traders anymore.

I'm not sure about the source of the depegging but it seems there has something to do with that. Likely a real thing or another FUD that has been made but nevertheless, people shouldn't be stacking wbtc but btc.

Whether it has or has nothing to do with FTX or Alameda. People should just learn to bail out in wbtc because it's not the real bitcoin. There has to be the understanding of many people these days that they need to be wiser around when exchanges are biting the dust and so as other projects and wbtc could be the next thing, not spreading FUD but awareness.

True, I don't get it why they have to make wrapped bitcoin. I've got no issues if they'll make wrapped ethereum and other altcoins but, they've just find a way to print money out of nothing by doing this. There's also the renbtc, it might still be inline and pegged to btc but who knows until when?

I agree but we don't understand why there are still people that will choose to hold it from the actual and real bitcoin. I guess it's just all about laziness and they're confident that nothing will happen and won't collapse.

more reason not to buy it and avoid it because the price isn't backed by anything it can crash and you lose your btc. People should already learned that these wrapped tokens aren't safe

WBTC isn't a real BTC and there's no guarantee if WBTC price always pegged with real BTC price. More importantly WBTC is a centralized shitcoin and can be controlled by the developer, it's really ruin the purpose and aims of a real Bitcoin. Why should someone need to buy WBTC if you can buy BTC with the same price? right now Bitcoin fees is cheap too since the mempool is currently empty, the fees is just less than $1.

The main reason must be coming from this guy on twitter https://twitter.com/DU09BTC/status/1596188005592891392

Another FUD was coming to the WBTC and claimed that alameda research has been minting lots of WBTC and that makes people are feeling panic then started to dump their BTC. it can be said that if this time WBTC has been getting depegged caused by there are more people selling in the market rather than buying it and so liquidity may got drainer very soon.

Ok so we take notice of another de-pegged, ouch, I do hope that the market will not be that affected by this news, otherwise, everyone is still nervous because of what the FTX collapse did bring to us.

And there are news that the depeg has something to do with Alameda Research?

https://coingape.com/wrapped-bitcoin-wbtc-depeg-linked-to-alameda-research-fud-or-truth/

Thanks for that additional link and for the reason. Usually, projects that are smart contracts and is just sitting on another chain can easily be manipulated by whoever has made it. It took a long time before this has been depegged and just like the crash of UST, this could be continuous.
I'm not wishing ill those that are holding wbtc but it's not the real bitcoin. They better buy the actual bitcoin and hold it as is and not with a smart contract that could be badly dumped by whoever has made it. I just looked at the pricing again and its still around value and price of its DE pegging.

I'm not also affected by this but everyone who's started to notice it has also shared so that before anything happens big, they could their assets from its possible collapse.
Bringing it back to 1:1 can be done by its community naturally but if it's the opposite that's being done by major holders of it, then we might not see it again par to bitcoin's price.

Thanks for this link, in any case though, if this is true then the effect from those investors or those who think that everything could be pegged on USD or BTC might be wrong. I'm not into this Wrapped BTC though, so personally I'm not affected.

But with the FTX collapse still hugging the limelight and the investors are still at the edge, this news might put some dent not just on the project itself, but for the whole crypto. So it's very important for them to bring it 1:1 again or at least very close to the price of BTC.

I didn't even noticed. I was looking for a possible reason for the depegging and saw a comment on Reddit claiming it was because the WBTC on Ethereum bridge were stolen. That caused some panic selling and so the drop. I can't verify the information right now so just do some digging if you want https://www.reddit.com/r/harmony_one/comments/oiz1uj/comment/ixgqrz3/