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Bitcoin (BTC) edging higher as nearly 100,000 coins are locked in DeFi

By: Invezz
Report suggests Bitcoin hash rate looks intense despite the heavy rains

Bitcoin (BTC) price is trading over 5% higher this week as the buyers attempt to secure a weekly close above $11,200. Separately, the recent data shows that over $1 billion worth of Bitcoin (nearly 100,000) are now tokenized over decentralized finance protocols on Ethereum. 

Fundamental analysis: DeFi trend winning over

The latest data from DeFi metrics provider, Defi Pulse, shows that around 98,300 BTC has been tokenized through protocols apart from Blockstream’s Lightning Network, amounting to over 12% of DeFi’s $8.57 billion combined capitalization. Over half of the BTC amount has moved in the last 30 days.  

This data indicates the rising popularity of Ethereum-powered protocols that Bitcoin holders use to generate passive income. At the start of June, the complete DeFi sector had the total value locked of only $1.05 billion TVL, 4.7% of which belonged to Bitcoin, signalling that the stake of DeFi’s value represented by Bitcoin has surged by 150% over three and a half months. 

On the other hand, Lightning Network has pulled in only 1,100 Bitcoin or $11.5 million since launching in March 2018. Most of Bitcoin in the DeFi sector turned into Wrapped Bitcoin (WBTC) in June. 

However, the rollout of Ren’s increasingly decentralized Virtual Machine and RenBTC along with grassroots tokenization protocols like PieDAO’s BTC++ in 2020 have helped Bitcoin significantly expand in the DeFi sector.

The tokenization protocols allow users to lock up their BTC and mint the matching ERC-20 token, enabling the value determined by a user’s Bitcoin holding to communicate with smart contracts on the Ethereum network.

Wrapped Bitcoin is still the most popular tokenization protocol by total BTC locked after pulling in 56,800 Bitcoin (almost $605.5 million) since November 2018. Ren’s Virtual Machine, on the other hand, has tokenized 21,500 Bitcoin worth $230 million since it started operating in May.

Technical analysis: BTC grinding higher

Unlike in some previous occasions, it seems that the BTC buyers have opted for a slower, but likely a more sustainable approach. Bitcoin price gained in five out of six last days to trade more than 5% higher on the week.

Bitcoin daily chart (TradingView)

The bulls are now approaching the key weekly resistance line at $11,100. A weekly close above this resistance line would pave the road for a move above $12k.

Summary

Nearly 100,000 Bitcoin has now been tokenized across DeFi protocols on the Ethereum network, according to the latest set of figures. In the meantime, the buyers are pushing BTC price higher in an attempt to close above $11,100 at the end of the week. 

The post Bitcoin (BTC) edging higher as nearly 100,000 coins are locked in DeFi appeared first on Invezz.

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