Why Did $WBTC Experience a Sudden Spike?
$WBTC , or Wrapped Bitcoin, was created to address the limitations of BTC's lack of smart contract functionality. Since DeFi primarily operates on the Ethereum blockchain, WBTC enables Bitcoin holders to participate in DeFi activities by issuing WBTC on Ethereum in a 1:1 ratio to staked BTC. This mechanism enhances the capital efficiency of Bitcoin while bridging it to the Ethereum ecosystem.
Conclusion: The WBTC trading pairs on Binance currently suffer from extremely low liquidity, with only around 100 WBTC required to significantly impact the market. This lack of liquidity has likely made these pairs vulnerable to manipulation.
It is suspected that this event could be linked to a large-scale theft of WBTC from a major holder.
Hackers may be exploiting the low-liquidity trading pair for wash trading as a means to launder funds. Further details are expected to emerge following Binance's official announcement tomorrow.
Despite this incident, WBTC remains a widely utilized token with substantial liquidity on-chain.