With bitcoin prices retreating over the past month, crypto traders have increasingly tokenized the cryptocurrency into synthetic versions compatible with the Ethereum blockchain, where they can be deposited for extra yield.

The number of bitcoins locked on the Ethereum blockchain via wrapped bitcoin, a decentralized finance (DeFi) protocol leveraged to convert BTC to ERC-20 tokens, has increased to a record 189,000 BTC, according to Arcane Research’s weekly note published Tuesday. The tally has increased fourfold in the past 12 months to a record 1% of bitcoin’s circulating supply of 18.73 million.

The trend shows how some savvy crypto traders have pivoted to salvage or maintain returns even as bitcoin’s price tumbled by 35% last month.

“Lackluster performance by bitcoin and growing interest in Ethereum-based exchange-traded products did little to derail the long-lasting trend of locking bitcoin on the Ethereum network,” Denis Vinokourov, head of research at Synergia Capital, told CoinDesk. “It shows the hunt-for-yield trade is nowhere near the exhaustion mark and also underlines the growing comfort, as well as a sense of security, that wrapping bitcoin is a safe method in earning yield on assets, be that by retail or more professional market participants.”

Each wrapped bitcoin token is backed by one bitcoin, so theoretically prices for the tokens should be roughly equivalent. The protocol essentially allows bitcoin holders to tokenize (lock) their coins on Ethereum for an
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