Originally published on: November 24, 2024
In a surprising turn of events, the price of Wrapped Bitcoin (WBTC) on Binance took a nosedive to an unprecedented low of approximately $5,200 on November 23. This flash crash, attributed to an electronic glitch impacting the trading system, starkly contrasted with WBTC’s stable price on other exchanges.
Initially trading at around $98K, WBTC’s sudden drop caused a stir among traders and investors. However, the cryptocurrency quickly recovered, closing the day at approximately $97K on Binance and returning to its usual trading levels.
This sharp decline coincided with Coinbase’s announcement to delist WBTC by December 19, 2024, in favor of its proprietary tokenized Bitcoin product, cbBTC. Despite the delisting decision, Coinbase assured users that their WBTC funds would remain accessible for withdrawal.
BiT Global, the custodian for WBTC, alleged that Coinbase’s move aimed to promote cbBTC over other Bitcoin wrappers in the market. The controversy surrounding WBTC’s custody structure, involving multiple jurisdictions like the United States, Hong Kong, and Singapore, added fuel to the fire.
Interestingly, the involvement of Tron founder Justin Sun in the custodial agreement sparked widespread criticism within the crypto community. This discontent eventually led to the Sky community voting to remove WBTC as a trading collateral on their platform.
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