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Wrapped Bitcoin was launched in 2019 to give Bitcoin investors an option to use the asset in decentralized finance applications.
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The price of Wrapped Bitcoin (WBTC) on Binance briefly and rapidly plunged to an all-time low of approximately $5,200 on November 23, 2024, in an apparent flash crash that did not affect the price of the asset on other exchanges.
WBTC began the day trading at normal price levels of around $98K before plummeting due to an electronic error affecting the trading system — the most common cause of flash crashes.
Price rebounded almost immediately, and the daily candle for Wrapped Bitcoin on the Binance exchange closed the day around the $97K price point and is currently trading at normal levels.
The Wrapped Bitcoin flash crash came days after Coinbase revealed it would delist WBTC in a November 19 announcement. “Coinbase will suspend trading for WBTC on December 19, 2024, on or around 12 PM Eastern Time,” the exchange told followers on social media.
The WBTC flash crash on Binance. Source: TradingView
Related: Wrapped Bitcoin in DeFi: Evaluating wBTC, cbBTC and tBTC
Coinbase comes under fire for delisting WBTC
“We regularly monitor the assets on our exchange to ensure they meet our listing standards,” Coinbase said during the WBTC delisting announcement, but also assured customers that their WBTC funds would still be available for withdrawal.
In a statement to Cointelegraph, BiT Global, the custodian for WBTC, claimed that Coinbase delisted WBTC to give its own tokenized Bitcoin product, cbBTC, an advantage over other Bitcoin wrappers. A spokesperson for BiT Global wrote:
“It’s clear that Coinbase’s decision is an attempt to gain a competitive advantage, pushing forward their own wrapped Bitcoin product, cbBTC, and removing the largest and most influential competitor in WBTC.”
Coinbase launched cbBTC in September 2024 amid a controversy surrounding Wrapped Bitcoin’s transition to multi-jurisdiction custody. The multi-jurisdiction custodial structure shared the custody of the private keys to the underlying Bitcoin (BTC) backing WBTC between the United States, Hong Kong, and Singapore.
The involvement of Tron founder Justin Sun in the new custodial agreement drew widespread concerns from the crypto community — sparking a backlash from the former Maker community, now known as Sky. This backlash eventually culminated in the Sky community voting to drop WBTC as trading collateral on the platform.
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This article first appeared at Cointelegraph.com News
