As a seasoned researcher with over two decades of experience in the dynamic world of cryptocurrencies, I can’t help but find the recent turn of events surrounding Wrapped Bitcoin (WBTC) intriguing and somewhat perplexing. The flash crash on Binance, followed by Coinbase’s decision to delist WBTC, has certainly stirred up a storm in the crypto community.
On November 23, 2024, the value of Wrapped Bitcoin (WBTC) on Binance suddenly and dramatically dropped to a record low of around $5,200, suggesting a possible flash crash. However, the price of this asset remained unaffected on other trading platforms.
To start, Wrapped Bitcoin (WBTC) was trading at typical values near $98,000 in the morning, but it suddenly dropped as a result of an electrical issue that impacted the trading platform – a problem often linked to flash crashes.
The price bounced back swiftly, ending the daily session for Wrapped Bitcoin on Binance near the $97,000 mark and now trading at its regular value.
A few days following Coinbase’s declaration on November 19 that they would cease trading Wrapped Bitcoin by December 19, 2024, approximately noon Eastern Time, a sudden drop in WBTC’s value occurred. In essence, Coinbase had announced the termination of WBTC trades on their platform.
Coinbase comes under fire for delisting WBTC
Coinbase frequently checks the assets listed on its platform to make sure they adhere to our criteria, as mentioned in the WBTC de-listing statement. However, users can rest easy knowing that their WBTC funds remain accessible for withdrawal.
According to a statement made to CryptoMoon, Bit Global, the guardian of WBTC, asserted that Coinbase removed WBTC from their platform in order to boost its own tokenized Bitcoin product, cbBTC, compared to other Bitcoin encasements. A representative for Bit Global penned this claim.
“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.”
In September 2024, Coinbase introduced cbBTC during a stir caused by Wrapped Bitcoin’s shift towards multi-region custody. This novel custodial system divided the control of the private keys associated with the underlying Bitcoin (BTC) supporting WBTC among the U.S., 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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2024-11-25 00:55