Wrapped Bitcoin (WBTC) Price Crashed 95% on Binance, Recovered, and Then Coinbase Announced It Would Delist WBTC Due to Liquidity Concerns

Wrapped Bitcoin (WBTC), issued by crypto firm BitGo, lost nearly 95% of its value in under an hour on Binance, crashing from $98,500 to $5,209 before recovering to around $98,000 on Nov. 23.

The price of Wrapped Bitcoin (WBTC) crashed by nearly 95% in less than an hour on Binance on Nov. 23, dropping from $98,500 to $5,209 before recovering to around $98,000.

The sharp price drop occurred just days after Coinbase announced that it would be delisting WBTC due to liquidity concerns. However, the cause of the flash crash remains unknown, with neither BitGo nor the WBTC team commenting on the incident.

The incident adds another layer of complexity to the relationship between Coinbase and WBTC’s custodial partner, Justin Sun, who became involved with WBTC through a joint venture between BitGo and his companies. In August, BitGo announced a joint venture with BiTGlobal, a Hong Kong-based trust company linked to Sun.

Sun’s involvement in WBTC has led to the creation of multiple competing tokens. In addition to cBTC, crypto exchange Kraken also launched its wrapped Bitcoin called kBTC. In response to the growing competition, Sun criticized Coinbase for failing to complete a proof-of-reserves process for cbBTC.

Launched in 2019, WBTC allows Bitcoin liquidity to flow into decentralized finance ecosystems by tokenizing Bitcoin (BTC). The token is pegged 1:1 with Bitcoin and currently has a market capitalization nearing the $14 billion mark.