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Wrapped BTC and Ethereum Network
Thanks to the creation of the wrapping technology, Bitcoin was able to become part of the Ethereum network despite functioning on a completely different blockchain. Thanks to the technology, users are able to make the trading and swapping process with BTC significantly easier.
Wrapped BTC is fully tied to the original asset and does not require any technical knowledge on the part of the user. The asset became even more popular in 2021 as traders shifted almost 1% of Bitcoin's circulating supply to the Ethereum network.
Companies and corporations have decided to receive even more exposure to Bitcoin than previously with a 0.5% increase in cryptocurrency balances on the balance sheets of various companies.
The location of #Bitcoin's circulating supply has experienced some large changes in 2021.#Bitcoin has been flowing into corporate treasuries, exchange-traded investment vehicles and to the #Ethereum network in the form of WBTC.— Arcane Research (@ArcaneResearch) December 23, 2021
From our weekly report: https://t.co/1BRmx043AV pic.twitter.com/CrdhJ9YaLa
Due to its impressive performance in 2021, Bitcoin has become one of the most pleasing assets to hold onto for both private investors and companies. In 2021, even more companies, like Microstrategy, stated they are either already holding or are just buying into the decentralized asset.
In addition to private companies, some countries have also decided to either become investors, as in El Salvador's, or hold confiscated funds for profit.
Exchange balances and investment products
With the further development of the decentralized finance sector, the exchange has become more than just a place to exchange digital assets into fiat. Some exchanges are currently offering their lending, borrowing and investing solutions to private investors.
Financial products on exchanges have welcomed 0.69% of Bitcoin's circulating supply, while hot exchange wallets have "lost" 1.19% of the supply, which is tied to the cryptocurrency's price performance in 2021.