Wrapped Bitcoin (WBTC) was introduced in 2019 to allow Bitcoin investors to use it in decentralized financial applications. This cryptocurrency experienced a flash crash, falling to an all-time low of approximately $5,200 on the Binance stock market on November 23, but it did not affect the asset’s price on other exchanges.
The reason for this crash was an electronic glitch in the trading system, which is the most common cause of flash crashes. The exchange rate rebounded almost immediately, and Wrapped Bitcoin closed the day at around $97,000 on the Binance exchange. Furthermore, days before the flash crash, Coinbase announced that it would delist WBTC on December 19, 2024, at 12:00 PM ET.
Coinbase stated that it regularly reviews assets on its exchange to ensure they meet the exchange standards, but also assured customers that their assets held in WBTC would still be available for withdrawal. BiT Global, the custodian of WBTC, claimed that Coinbase delisted WBTC to give its own tokenized Bitcoin product, cbBTC, an advantage over other wrapped Bitcoin assets.
Coinbase launched cbBTC in September 2024 in response to the controversy surrounding Wrapped Bitcoin token escrow in multiple jurisdictions. This decision led to widespread displeasure in the crypto community, particularly the former Maker community, which is now known as Sky. The backlash culminated in the Sky community voting to remove WBTC as trading collateral on the platform.
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<p>The post Wrapped Bitcoin’s Flash Crash: The Controversy Surrounding Its Delisting and Its Impact on the Crypto Market first appeared on CoinBuzzFeed.</p>
