A bitcoin-backed ethereum token is coming in 2019, and it could help a struggling corner of the crypto market

Quick Take

  • BitGo announced a new bitcoin/ethereum cross-breed. 
  • The new token, set to launch in 2019, will be a bitcoin-backed ethereum token.

Just when you thought you had wrapped your head around the wonky digital asset space, along comes a new seemingly esoteric crypto project. 

This time, it's a bitcoin/ethereum cross-breed. The so-called Wrapped Bitcoin, announced Friday by a group of industry participants including custody solutions provider BitGo, aims to bridge the gap between the two largest cryptocurrencies by market capitalization: bitcoin and ethereum. 

As the first coin to market, bitcoin benefits from deep liquidity and more price stability than its smaller rivals. Still, it lacks some of the functionality of ethereum tokens, including smart contracts and interoperability with certain ethereum-based applications. The new WBTC token, which is set to launch in 2019, will be an ether token backed 1:1 by bitcoin. 

In a sense, it'll work similarly to stablecoins which are tokens that offer the benefits of cryptos and are backed by fiat currencies, such as the USD. 

A DEX Dream

Let’s say you only hold bitcoin, but you want to use an ethereum-based app that requires ERC-20 tokens. You could convert your BTC to WBTC to use the application. 

For example, there's a new app that requires you to purchase XYZ token. You want to use the app but don’t want to purchase the token because it is illiquid or because you don’t trust the security of the token, then you could convert your BTC to WBTC and have that app accept your WBTC as payment to use their app. 


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