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In a recent update, the leading crypto exchange Kraken has announced the launch of Wrapped Bitcoin, kBTC, sparking market optimism. This new ERC-20 token is expected to boost the BTC’s utility across decentralized finance (DeFi) platforms. Besides, it also comes after another top exchange, Coinbase, has launched its Wrapped BTC cbBTC.
Notably, this Wrapped BTC will be fully backed 1:1 by Bitcoin, securely stored in the exchange’s custody solution.
Kraken Launches kBTC Sparking Market Optimism
The leading crypto exchange, Kraken recently announced the launch of Wrapped Bitcoin, kBTC, boosting BTC’s appeal in the market. The launch would bring the crypto’s value into blockchain networks like Ethereum and OP Mainnet, a former version of Optimism.
Notably, this ERC-20 token would allow BTC to be used on DeFi platforms. It could enhance the utility of the crypto beyond its traditional role as a store of value. Notably, the product, which is fully backed 1:1 by BTC held in Kraken’s US-based custody solution, from one of the top crypto exchanges comes with an added focus on security and transparency.
Meanwhile, the exchange said that the new product is designed to maximize BTC’s strengths like security, and scarcity, while also allowing it to integrate into DeFi seamlessly. Besides, the smart contract behind kBTC underwent a strict audit Trial of Bits, ensuring users’ safety.
According to the update, the users can verify kBTC on-chain at any time, enhancing market confidence in the token’s legitimacy. Wrapped Bitcoin tokens like kBTC enable BTC to be traded, lent, or used as collateral on DeFi platforms, a feature that was previously unavailable on these networks.
Wrapped BTC Competition Rises
Kraken’s entry into the wrapped Bitcoin market follows closely behind Coinbase’s recent launch of its own Wrapped Bitcoin token, cbBTC. These moves come as major exchanges seek to strengthen BTC’s integration into decentralized finance, providing users with greater flexibility in how they utilize their BTC holdings.
While wrapped Bitcoin tokens like WBTC have already established a significant presence in the market, kBTC aims to stand out with its transparent and secure backing. It could further solidify BTC’s role in the DeFi space.
Besides, the decision comes amid soaring institutional interest in BTC. For context, the US Bitcoin Spot ETF has recorded an inflow of over $20 billion to date, with BlackRock alone accumulating 5,805 BTC in a day. It also comes a day after Bitcoin hits $68k, indicating a growing market confidence towards the crypto.
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Rupam Roy
Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
Rupam’s career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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