Wrapped Bitcoin (WBTC), an ERC20 token backed 1:1 by Bitcoin on the Ethereum network, displayed a bullish momentum earlier today with an 88% gain in its 24-hour trading volume after experiencing a bearish trend over the previous several days.
According to the data from CoinMarketcap, the token’s current trading volume is about $83 million, up almost 64% in the previous 24 hours. Additionally, during the same period, its market cap increased by 2.30%.
However, “InvestorsObserver gives Wrapped Bitcoin (WBTC) a medium risk rank,” as WBTC is currently trading at $17,208.47 and showing a rise in both daily and weekly charts by about 2.34% and 2.34%, respectively.
Similarly, the most prominent cryptocurrency, Bitcoin (BTC), is also rising in value. It is presently trading at $17,252.51 and has increased by a significant 3% in the previous day and 1.18% during the last seven days.
The 24-hour volume of BTC is also noteworthy; it shows an increase of almost 26%, while its market capitalization has increased by 2.51% during the past 24 hours, as per CoinMarketcap’s statistics.
Factor Behind Wrapped Bitcoin Bullish Trend
This positive trend began after it was revealed that Binance, the leading crypto exchange, owns 97% of the assets under scrutiny in Bitcoin and Wrapped Bitcoin. It was revealed by an auditing firm Mazars, which released a report about Binance’s proof of reserves on December 7th
The report provides current and potential customers of Binance with more transparency and assurance that their” In-Scope Assets are collateralized,” visible on blockchains and under the exchange’s control.
According to the report’s statement:
For the purpose of this Agreed-Upon Procedures (“AUP”) engagement, the term “collateralized” will be defined as where Binance’s In-Scope Assets are equal to or greater than the net liability of In-Scope Assets as per the Customer Liability Report owed to and receivable from customers.
However, the report said, the range of assets under scrutiny includes Bitcoin and wrapped Bitcoins (BBTC and BTCB) held on Bitcoin, Ether, BNB Chain, and Binance Smart Chain blockchains.
Without accounting for the Out-Of-Scope Assets consumers promised as security for the In-Scope Assets lent through the margin and loans service offering, it was discovered that Binance was 97% collateralized, leaving negative amounts on the Customer Liability Report.
However, the report discovered that Binance was 101% collateralized after taking into account loans that were overcollateralized by Out-Of-Scope Assets as well as loans made to clients on margin.
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