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$1.5 Billion BTC Moved to ETH Amidst Decentralized Finance Recovery

According to reports, Ethereum currently houses the highest number of decentralized finance (DeFi) protocols available today. This includes the highly-successful Uniswap DeFi protocol. For users to gain access to these protocols, they need to first own ERC20 tokens. The total number of Bitcoin locked up in DeFi protocols recently reached an all-time high. This is a sure sign of the decentralized finance (DeFi) ecosystem gaining ground once again following a recent drop in DeFi value.

Analytics platform DeFi Pulse shows about 141,684 bitcoins have been recently converted to ERC20 tokens. This is approximately $1.5 billion worth of BTC. According to reports, this conversion is a result of the growing number of investors in the still-rising DeFi space.

Incompatibility amongst BTC and ETH blockchains

It is currently impossible to directly invest Bitcoin in DeFi protocols housed on Ethereum. This is majorly due to the incompatibility of both blockchains. To invest in DeFi protocols, Bitcoin holders will need to first convert their tokens to ERC20 tokens.

One major way to do this is to convert Bitcoin to wrapped Bitcoin (wBTC). This conversion is also carried out on a 1:1 basis. wBTC provides users with a wide range of options to choose from with regards to DeFi protocols. With wBTC, platforms like Aave and Compound are accessible. According to DeFi Pulse, there is a TVL of $1.14 billion of wBTC in the DeFi ecosystem.

Following about a 60% drop in value from its ATH of $43,873, yearn.finance (YFI) has begun once again to gain traction. Other notable DeFi protocols, such as Aave (LEND) and Chainlink (LINK), have shown renewed growth after a period of loss. The rise in BTC conversion to ERC20 tokens has been linked to the recent surge in DeFi protocols.

Popular crypto analyst Kevin Svenson also recently pointed out that more bullish trends should be expected in the DeFi space. He added that “If global market keeps moving up,” the DeFi space is sure to also remain bullish.

A major pointer to DeFi strength is Uniswap. The DeFi protocol recently surpassed Coinbase in monthly volume. Recently, we also covered major DeFi happenings in 2020 Q3.

Bitcoin price is currently at $11,446, a drop of 1.7% over the last 24 hours. Conversely, wBTC is trading at $11,452, representing a drop of 1.8% over the last 24 hours.

We also recently covered a 31% and $75 billion increase in decentralized finance on the Altcoin Buzz YouTube channel.

 
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