Bitcoin on Ethereum: Start of a Surge?

Data used for this article were as of 27 May 2020. Daily USD value of BTC tokens were taken from BTC’s daily value, which may not reflect the actual token’s value.

Bringing Bitcoin into the Ethereum fold has long been a goal of many projects. Over the last month, the momentum for this has grown massively with Maker adding WBTC as collateral for DAI and tBTC ramping up its mainnet launch making the news.

In this article, we take a look at the numbers behind the headlines.


  • Bitcoin tokens doubled their amount in May
  • WBTC drove the growth and consolidated its position
  • Maker the kingmaker
  • Breakdown of holders by token
  • Transactions spiked up in April, even before amount did
  • A look at the upstarts


Are the headlines justified? In short, the answer is a resounding yes. Within May alone, BTC tokens on the Ethereum blockchain have doubled from around 2,500 BTC to more than 5,000 BTC!

Source: BTC on Ethereum

This value in USD terms stands at $47.7M. It is more than 5x the amount on public Lightning Network.

Bitcoin on Ethereum is more than 5 times the amount on public Lightning Network.

The growth is powered by Wrapped Bitcoin (WBTC), which had its total value locked shoot up 3x from $11M to $35M in 10 days.

Source: DeFi Pulse

These were driven by two minting events (on 11th and 21st May), adding $24M in value to the Ethereum blockchain with just $0.9 and $1.3 in fees each.

WBTC is now unquestionably the king of Bitcoin tokens. It holds almost 3 quarters of the entire balance held.

Interestingly, the next 2 largest tokens, Huobi BTC (HBTC) and The Tokenized Bitcoin (imBTC), share a trait with WBTC in that they all rely on centralized custodial solutions. The 4th largest, Synth Bitcoin (sBTC), is backed by the SNX token instead of any Bitcoin. Taking sBTC out of the equation, centralized custodial solutions currently make up 99.5% of Bitcoin tokens on Ethereum.

Centralized custodial solutions currently make up 99.5% of Bitcoin tokens on Ethereum.


Next, we take a look at the holders of these tokens. If WBTC is the king of Bitcoin tokens, Maker is its kingmaker. More than two thirds (68%) of WBTC tokens are held by Maker as collateral for DAI. Since Maker only approved WBTC as collateral for DAI on 3rd May, we may yet see them dominate even more of an increasing WBTC pie.

WBTC is also eating up more of DAI’s collateral pie on Maker. In just one month, WBTC shot past USDC and BAT, now only behind ETH as collateral for DAI with it backing 7.8% of all DAI.

Source: DAI stats

Looking at the top 10 token holders, 6 of them are confirmed DeFi platforms. In fact, looking at the value held by each, at least 82% of total WBTC are locked in DeFi! This supports the narrative that BTC tokens are useful for those holding BTC to ‘make their Bitcoin work for them’ by transferring them over to Ethereum to access DeFi.

The second largest holding of WBTC is by Compound, which uses WBTC to back its own cWBTC token. cWBTC launched in July 2019, even earlier than other BTC tokens after WBTC. Its total value at $1.7M is actually larger than that of sBTC!

*Since cWBTC uses WBTC itself as collateral, we excluded them from calculations of total value above.

In contrast to WBTC, HBTC is largely held by Huobi itself. 89% of total holdings are held by Huobi wallets.

Of the four largest BTC tokens, imBTC’s token holdings are spread out across the most addresses. Comparing the four, its top 64 addresses hold 90% of all imBTC; 90% of sBTC is held by its top 26; 90% of WBTC is held by its top 14; HBTC is by far the most concentrated with 99% of all HBTC held in only 5 wallets. As noted above, since most WBTC is held by DeFi platforms, the actual addresses utilizing the value of WBTC is far larger than shown here.


Switching lenses to that of transactions, we see that the momentum behind WBTC actually premeditated its inclusion as collateral for DAI in May. From March to April, the number of transactions shot up by 61% and the USD value transferred ballooned by 7x!

Looking at the count of transactions from other BTC tokens, some trends stand out:

  1. imBTC suffered a sharp decline in May (potentially due to the hacks on Uniswap and that used imBTC tokens)
  2. sBTC has had a slowdown in transactions since its peak in January
  3. Consistent with the token holdings data, HBTC has only a small number of transactions compared to the large amount of HBTC created
  4. pBTC transactions have risen sharply since starting out in March, quickly eclipsing HBTC and sBTC

The Upstarts

pBTC’s transactions mentioned above brings us to the young upstarts looking to dethrone WBTC. All of these three tokens: pBTC, tBTC, and renBTC hold BTC collateral in a more decentralized manner than the other tokens mentioned above.

The numbers show it is still early days for these tokens. While the number of pBTC transactions exceeded sBTC in May, the value transferred over the same period was only $1M for pBTC compared to $4.6M for sBTC.

For tBTC and renBTC, transactions started around the same time in May and have only been done for test purposes. tBTC had to pause their contract on the 18th after finding an issue with the contract.

Ending Note

The increasing growth of DeFi on Ethereum has come with a notable trend of new Bitcoin tokens being created. WBTC was first to launch and be adopted. It has only consolidated its lead in market share since. It will be interesting to see if the other Bitcoin tokens including new upstarts tBTC and renBTC can overcome its current first mover advantage.

As interest in and adoption of DeFi continues to grow, value locked in Bitcoin may find more of its way to Ethereum. 2020 looks set for a surge in Bitcoin tokens!

Harith Kamarul
Harith Kamarul
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