Despite DeFi Cooldown, Nearly $1 Billion in Bitcoin Moved to Ethereum in October

Ethereum remains the most popular off-chain destination for Bitcoin (BTC) as the total supply of Bitcoin tokenized on the Ethereum chain exceeded 150,000 BTC (worth approximately $2.05 billion) at the end of October, up 21% from September.

However, growth has slowed significantly as the decentralized finance (DeFi) craze began to slide from its peak at the end of the third quarter of 2020. According to Dune Analytics data, about $360 million worth of Bitcoin was tokenized in October, far lower than the $737 million in September.

Ryan Watkins, a Bitcoin analyst at Messari, said the main reason for the slowdown in growth is the sharp decline in yields for liquidity mining on Ethereum since its peak in September.

“Both Curve and Uniswap liquidity mining have been major drivers of Ethereum’s overall market cap growth,” Watkins told CoinDesk. “Both have seen yields fall significantly since their peaks in September.”

It is worth noting that although Defi profitability in October was significantly lower than in August or September, the rate of tokenized Bitcoin continued to exceed the rate of Bitcoin mining issuance for the third consecutive month. According to Coin Metrics, miners mined a total of 26,256 BTC in October, and 26,267 BTC were marked and transferred to Ethereum during the same period.

Wrapped Bitcoin (WBTC), the largest tokenized Bitcoin project controlling more than 80% of the market, minted nearly 26,000 ERC-20 Bitcoin-backed tokens in October. In September, more than 56,000 new WBTC were issued.

As reported by CoinDesk, smaller tokenized Bitcoin projects also saw significant growth in October, most notably tBTC, which was relaunched by Thesis in late September. Within the first month of its relaunch, tBTC provided more than $10 million worth of Bitcoin-backed tokens. During the same period, users also minted and off-chain more than 5,000 BTC.

According to Dune Analytics, the current supply of all tokenized Bitcoin to date is over 152,000 BTC, worth approximately $2.3 billion, an increase of more than 18,000% since January.