On November 23, 2024, the price of Wrapped Bitcoin (WBTC) on Binance fell briefly. It quickly fell to an all-time low of around $5,200. Meanwhile, the original BTC price on the Bitcoin network continues to trade at $98,000. Here are the details…
Wrapped Bitcoin price on Binance fell to $5,000 with a flash crash
A significant flash crash occurred that did not affect the asset’s price on other exchanges. Because the cost of Wrapped Bitcoin on Binance lost value in a short period of time on November 23, 2024. It quickly fell to an all-time low of around $5,200. WBTC was trading at an average price of around $98,000 before experiencing a significant drop due to an electronic error affecting the trading system, which is the most common cause of sudden crashes. The daily candle for Wrapped Bitcoin on the Binance exchange closed the day at around $97,000. Thus, the price recovered almost immediately. It is currently trading at normal levels.
The flash crash of Wrapped Bitcoin appears to be related to an announcement made by Coinbase on November 19. The price change came just days after the exchange announced its intention to delist WBTC. The exchange informed its followers on social media that trading for WBTC would be suspended on December 19, 2024. The flash crash of WBTC on Binance is clearly seen in the chart above.
Coinbase faces criticism for delisting Wrapped Bitcoin
“We continuously monitor assets on our exchange to ensure they meet our listing standards,” Coinbase said during the WBTC delisting announcement. However, the company also assured its customers that WBTC funds will remain accessible for withdrawal. BiT Global, the custodian of WBTC, claimed in a statement that Coinbase delisted WBTC to give its tokenized Bitcoin product, cbBTC, an advantage over other Bitcoin derivatives. A BiT Global spokesperson said:
It is clear that Coinbase’s decision is an attempt to gain a competitive advantage, highlight its wrapped Bitcoin product cbBTC, and eliminate the largest and most influential competitor in WBTC.
In September 2024, Coinbase launched a new altcoin. It introduced cbBTC in response to a controversy surrounding Wrapped Bitcoin’s transition to multi-jurisdictional custody. The United States, Hong Kong, and Singapore share custody of Bitcoin’s private keys, which form the basis of WBTC, in a multi-jurisdictional custody structure. The crypto community’s widespread concerns about Tron founder Justin Sun’s involvement in the new custody arrangement led to a backlash from the former Maker community, now known as Sky. Ultimately, the Sky community voted not to use WBTC as collateral for trading on the platform due to this backlash. We will share developments regarding the fate of WBTC as Kriptokoin.com in the coming period.
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