Wrapped Bitcoin Flash Crashes to $5K on Binance Exchange
Have you heard about the recent flash crash of Wrapped Bitcoin on the Binance exchange? It’s quite the story! Wrapped Bitcoin, which was launched in 2019 as a way for Bitcoin investors to use their assets in decentralized finance applications, experienced a wild ride on Nov. 23. The price of Wrapped Bitcoin on Binance dropped to an all-time low of around $5,200 before quickly rebounding.
Initially trading at around $98,000, an electronic error caused a flash crash on Binance, leading to the dramatic price drop. Fortunately, the price recovered almost immediately, and at the end of the day, Wrapped Bitcoin closed at around $97,000, returning to normal levels.
Interestingly, this flash crash happened shortly after Coinbase announced that they would be delisting WBTC. In a statement, Coinbase explained that they regularly review assets on the exchange to ensure they meet listing standards, leading to the decision to suspend trading for WBTC on December 19, 2024. Despite this delisting, Coinbase reassured customers that their WBTC funds would still be accessible for withdrawal.
According to BiT Global, the custodian for WBTC, Coinbase’s decision to delist Wrapped Bitcoin was seen as a move to promote their own token, cbBTC, over other Bitcoin wrappers like WBTC. This sparked controversy in the crypto community, especially considering the involvement of Tron founder Justin Sun in the custody agreement.
The situation escalated further when the Sky community, previously known as the Maker community, voted to drop WBTC as trading collateral on their platform. This decision followed concerns raised about Wrapped Bitcoin’s transition to multi-jurisdiction custody, which involved different countries sharing custody of the private keys to the Bitcoin backing WBTC.
It’s a fascinating turn of events in the world of cryptocurrency, with implications that extend beyond just the price movements of Wrapped Bitcoin. Stay tuned for more updates on this evolving story!
