Throughout this month, bitcoin and ethereum have risen to their highest valuations in years. These two pivotal crypto assets have substantially influenced the cryptocurrency market, with bitcoin currently holding a 51.9% market dominance and ethereum at 17% as of mid-March 2024. Furthermore, in recent years, derivative tokens of bitcoin and ether have garnered significant popularity. Among these, STETH and WBTC stand out as preeminent, ranking within the top 20 of the crypto economy’s market capitalizations.

Derivative Tokens Linked to Bitcoin and Ether Cement Their Status Over the Years

Labeled as wrapped, synthetic, derivative, or bridged – regardless of the terminology, these trends have markedly risen in importance in recent years. An initial example of bitcoin (BTC) derivatives, wrapped bitcoin (WBTC), made its debut in 2019. Presently, boasting a circulating supply of 155,434 WBTC, it holds the position of the 17th largest market capitalization across the entire cryptocurrency landscape.

WBTC stands as the most significant wrapped version of BTC, yet the crypto sphere is replete with other bitcoin derivative tokens, each pegged on a 1:1 basis with BTC. For example, Bitcoin Bep2 or BTCB, launched on the BNB Chain, boasts a circulating supply of 54,011 BTCB, ranking the BTCB market capitalization 205th among thousands in the cryptocurrency market. Moreover, the Avalanche blockchain circulates 3,747.32 BTCb, owned by 241,137 holders.

Additionally, derivative tokens with smaller market capitalizations connected to BTC, such as SBTC and BBTC, exist. Ethereum (ETH)-related derivative tokens also hold significant positions in the market, with Lido’s staked ether (STETH) being the foremost. Currently, STETH’s market valuation is $35.78 billion, placing it as the sixth-largest among the top ten cryptocurrencies. Although STETH leads with a 70.89% share of the liquid-staking ethereum derivatives market, numerous other options are available.

For instance, Rocket Pool’s liquid staking protocol secures $4.14 billion with 1.13 million ethereum underpinning its RETH token, making RETH the 58th largest market cap at present. While STETH accounts for 9.78 million ETH and RETH for 1.13 million, an additional 2.89 million ETH is invested in 25 different ether derivative token protocols. Cumulatively, the tokens invested across all 27 liquid staking derivative protocols represent 1.88% of the cryptocurrency economy’s total value of $2.7 trillion.

Source : Bitcoin News by Jamie Redman / Mar 17, 2024