Market supply of Bitcoin-backed Ethereum tokens has fallen.

The number of Ethereum-tokenized bitcoins has declined over the past two weeks, according to data from Dune Analytics.

On November 20, the market supply of ‘Bitcoin on Ethereum’ stood at 153,591. At the time of writing, the figure stood at 147,658 (−3.8%).

On December 1, the total market capitalization of the segment stood at $2.89 billion.

Market capitalisation of popular ‘Bitcoin on Ethereum’, in millions of dollars. Data: btconethereum.com as of 1 December 2020.

The share of WBTC in the segment is above 80%.

Data: Dune Analytics.

The chart below illustrates the evolution of the number of locked ‘Bitcoin on Ethereum’ tokens. The decline is evident across all popular coins in the segment.

Data: Dune Analytics.

The onset of the negative trend coincided with the surge in the price of bitcoin to new highs, which began in late November. Ethereum, the leading cryptocurrency, on December 1 surpassed the $630 mark, a level not seen since the first half of 2018. Such market dynamics could have prompted users to withdraw tokenized bitcoins from DeFi applications and subsequently sell them on the open market.

However, there is no meaningful cooling in the DeFi segment—the total value locked in DeFi applications (TVL) is approaching $15 billion.

Dynamics of the value of funds locked in the DeFi sector. Data: DeFi Pulse.

In November, the TVL rose by 32%—from $11.04 billion (1 November 2020) to $14.74 billion (1 December 2020). Since the start of the year the figure has risen 19.6-fold—from $0.752 billion (1 January 2020) to $14.78 billion at the time of writing.

In terms of the value of locked assets, WBTC ranks second in DeFi Pulse’s ranking, behind only Maker.

Given the overall trend, there are grounds to regard the current decline in the segment as temporary.

In October, WBTC’s market capitalization stood at about $1 billion. Since then the figure has risen by a factor of 2.3.

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