WBTC price flash crashes on Binance below $6k days after Coinbase delisting

Wrapped Bitcoin’s price dropped below $6,000 on Binance just days after Coinbase delisted it due to liquidity concerns.

Wrapped Bitcoin (WBTC), issued by crypto company BitGo, lost almost 95% of its value in less than an hour on Binance, falling from $98,500 to $5,209, before rising to $98,000 on November 23.

Price of WBTC against USDT | Source: crypto.news

The reason for WBTC’s sharp price drop is unknown and neither BitGo nor the WBTC team is commenting on the sudden crash. The incident comes just days after Coinbase announced that it would delist WBTC starting December 19 due to liquidity concerns.

Simultaneously, Coinbase is expanding its presence in the wrapped Bitcoin market with its own competitor, Coinbase Wrapped Bitcoin (cbBTC).

This move further complicates the relationship between Coinbase and WBTC’s custodian Justin Sun, who is involved in WBTC through a joint venture between BitGo and his companies. In August, BitGo announced a joint venture with BiTGlobal, a Hong Kong-based trust company affiliated with Sun.

Sun’s participation in WBTC has led to the creation of multiple competing tokens. Crypto exchange Kraken is launching its wrapped Bitcoin, called kBTC, as well as cBTC. In response to the increased competition, Sun criticized Coinbase for failing to complete the reserve proof process for cbBTC.

#cbbtc There is no Proof of Reserves, no auditing and can freeze anyone’s balance at any time. Essentially just ‘trust me’. Any subpoena from the US government could seize all your BTC. There is nothing more representative of central bank Bitcoin than this. It’s a dark day for BTC.

— HE Justin Sun 🍌 (@justinsuntron) September 12, 2024

Launched in 2019, WBTC tokenizes Bitcoin (BTC), allowing Bitcoin liquidity to flow into decentralized finance ecosystems. The token is pegged at a 1:1 ratio with Bitcoin and currently has a market cap of close to $14 billion.