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According to data estimates from Dune Analytics, nearly $ 60 million worth of bitcoins was transferred to Ethereum in June. Wrapped Bitcoin, the oldest tokenized bitcoin protocol on Ethereum, is responsible for around 75% of that growth after moving over 4,800 BTC to Ethereum last month.
Demand has increased for using bitcoin in a variety of decentralized financial services as Ethereum continues to be the most popular off-chain destination for bitcoins. More specifically, yield farming and MakerDAO adding tokenized bitcoin as collateral are likely strong catalysts, said Medio Demarco, former partner of Deutsche Bank and co-founder of cryptocurrency research firm Delphi Digital.
“The recent trend shouldn’t come as a surprise and will likely continue,” Demarco told CoinDesk.
The growing popularity of tokenized bitcoin is also no surprise to Ben Chan, CTO of BitGo, the cryptocurrency payment processor who led Wrapped Bitcoin. “The purpose of the WBTC is to bring bitcoin into the world of decentralized finance,” said Chan. “Yield opportunities for lending and providing WBTC” in Ethereum-based applications are driving recent growth, he added.
Currently $ 132 million worth of bitcoins is on Ethereum at the time of publication, or roughly 0.08% of the market cap of the major cryptocurrency, according to OnChainFX.
Is the growing demand to use bitcoin on Ethereum a positive sign for the leading cryptocurrency? According to Demarco, the trend has a “synergistic” effect for both blockchains.
Chan agreed, telling CoinDesk that, for Ethereum, asset value growth on decentralized finance applications is “a step towards maturing transparent and reliable financial services.” For Bitcoin, the advantage comes from the ability to earn returns and collateralize bitcoin, “which” adds incentives “for users to invest in the cryptocurrency, according to Chan.
Bitcoin usage on Ethereum is “potentially bullish for both networks,” Chan said.
