In talking about cryptocurrency, most people are most familiar with Bitcoin. Bitcoin is far and away the most famous cryptocurrency, and the most commonly understood when it comes to using the blockchain as a store of value.
However, others a little bit closer to the industry understand Ethereum, as a common runner-up terms of familiarity, holds its own with its unique functionality and ecosystem in the blockchain world.
Now new reports by Dune Analytics are showing that Ethereum is the largest single chain destination for Bitcoin assets that are abstracted away from just being held in a cold wallet.
Specifically, the study finds that the number of Bitcoins held on the Ethereum blockchains has reached 100,000, meaning that the total value is over $1 billion.
That’s even more astounding when you see that this number is up from around 73,000 just 10 days ago, suggesting that there has been a sudden mad rush to cloak Bitcoin in Ethereum smart contracts.
Experts talk about the use of “wrapped BTC,” which is an ERC-20 token pegged 1:1 to Bitcoin and held at Bitgo Trust.
To understand the concept, think about BTC as the “coin” and the value store, and Ethereum as the platform that it “sits” on.
Investors are also getting savvy about putting their digital assets, i.e. Bitcoin, into sophisticated ecosystems in order to get gains.
There’s even a name for this – insiders refer to it as “yield farming.”
Optimizing yield farming means putting the digital assets into the right type and the right number of coding setups, in order to maximize earnings.
Ethereum seems to be a good vehicle for this kind of activity, because of the Ethereum blockchain’s smart contract functionality. At least that’s a big consensus in a world where defi is coming into its own.
If you have crypto holdings, or you’re considering it, look into how to get more for your money with this type of complex approach.