21Shares launches wrapped Bitcoin 21BTC on Ethereum amid WBTC challenges 21Shares launches wrapped Bitcoin 21BTC on Ethereum amid WBTC challenges
21Shares’ parent company unveils Ethereum-based wrapped Bitcoin that gives customers "peace of mind."
2 min read
Updated: Sep. 3, 2024 at 2:17 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
According to a Sept. 3 statement, 21.co, the parent company of 21Shares, has introduced its Wrapped Bitcoin product (21BTC) on the Ethereum blockchain.
The company stated that it was collaborating with Flow Traders, a leading global market maker, to launch a product that would give customers “peace of mind as they explore decentralized applications and new opportunities on the Ethereum blockchain.”
21.co’s 21BTC aims to differ from competing products in the market because it securely stores the underlying assets in cold storage, eliminating the need for a bridge.
Eliezer Ndinga, head of strategy and business development at 21.co, stated:
“As one of the world’s largest issuers of crypto ETPs, we bring stringent asset management best practices and our operational excellence to the world of wrapped assets, involving institutional-grade custodians and security protocols.”
Bitcoin wrappers are ERC-20 tokens backed by BTC, issued on various blockchains, backed one-to-one by BTC, and held by a centralized custodian. To redeem, holders burn the tokens to receive native BTC, while minting involves depositing native Bitcoin to receive the tokens.
WBTC faces struggles
The launch of 21BTC coincides with challenges faced by WBTC, the most popular Bitcoin wrapper with a market capitalization of approximately $9 billion.
Over the past month, WBTC has been under increased scrutiny due to issues involving BitGo and TRON founder Justin Sun. On Aug. 9, BitGo announced plans to transfer control of WBTC to a joint venture with crypto custody platform BiT Global and Sun.
This announcement raised concerns within the community, particularly about Sun’s involvement in the project.
In response, the lending protocol Sky (formerly MakerDAO) voted to stop new users from borrowing against WBTC, and demand for the asset declined. Dune Analytics data shows that WBTC’s supply decreased by over 1,000 tokens last month, marking the third-highest monthly negative change this year.
In light of these developments, several competitors, including Coinbase, are seeking to challenge BitGo’s market dominance. Further, DeFi protocol Threshold has proposed merging its BTC “wrapper” token, tBTC, with WBTC in an effort to save the more popular BTC product.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Wrapped Bitcoin
$66,036.62
Wrapped Bitcoin delivers the power of Bitcoin with the flexibility of an ERC20 token.
tBTC
$65,304.25
tBTC is a decentralized wrapped Bitcoin that is backed 1:1 by main-net BTC.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
BitGo
BitGo is a market leader in institutional-grade cryptocurrency investment services, providing institutional investors with security, compliance, and custodial solutions for blockchain-based currencies.
21shares
21Shares is a Swiss provider of crypto- currency exchange-traded products (ETPs).
Justin Sun has carved a name for himself as a leading figure in the blockchain sector.