Wrapped Bitcoin Rebounds After Flash Crash on Binance

It is suspected that wBTC’s flash crash was caused by an electronic error on the exchange. The crash also happened not long after Coinbase announced that it will delist WBTC by December, which attracted some criticism from BiT Global. Meanwhile, Bitcoin's (BTC) price surged in November, and predictions suggest that BTC could hit $180,000 by 2025, supported by supply constraints, reduced exchange reserves, and bullish ETF inflows post-Trump's presidential win. Analysts also noted that Bitcoin's cyclical growth could push the opportunity cost on Pizza Day 2025 to a staggering $2 billion.

Wrapped Bitcoin Sees Record Low on Binance

The price of Wrapped Bitcoin (WBTC) experienced a sudden flash crash on Binance on Nov. 23, 2024, plunging to an all-time low of approximately $5,200 before rebounding almost immediately. This rapid decline was isolated to Binance and did not impact WBTC prices on other exchanges. 

wBTC started the day at around $98,000, but the price fell sharply due to an electronic error. This is a common cause of flash crashes in trading systems. Despite the dramatic event, the daily candle for WBTC on Binance closed near its original level of $97,000, and the token resumed trading at normal levels.

Wrapped Bitcoin flash crash (Source: TradingView)

This incident happened just days after Coinbase announced its decision to delist WBTC, effective Dec. 19, 2024, at approximately 12 PM Eastern Time. In its announcement, Coinbase explained that it regularly reviews assets to make sure they meet the platform’s listing standards, and reassured customers that WBTC holdings will remain accessible for withdrawal. 

However, the decision also drew some criticism. BiT Global, the custodian for WBTC, accused Coinbase of using the delisting to promote its own tokenized Bitcoin product, cbBTC. BiT Global claimed that Coinbase tried to eliminate WBTC as a competitor to give cbBTC a market advantage.

Coinbase launched cbBTC in September of 2024, amidst controversy surrounding WBTC’s transition to a multi-jurisdiction custodial model. This model distributed custody of the private keys to the underlying Bitcoin backing WBTC across the United States, Hong Kong, and Singapore. The inclusion of Tron founder Justin Sun in the custodial agreement also caused some concern in the crypto community. These concerns led to backlash from the Sky community, formerly known as Maker, which culminated in a vote to remove WBTC as trading collateral on their platform.

Bitcoin Price Could Hit $180K by 2025

The expectations for Bitcoin (BTC) are much better, as predictions suggest BTC’s price could reach $180,000 by the end of 2025. This is according to Georgii Verbitskii, founder of the TYMIO decentralized finance platform. Verbitskii projected a price range between $100,000 and $120,000 by late 2024 or early 2025, before President-elect Donald Trump assumes office on Jan. 20 of 2025. 

Bitcoin’s price action over the past year (Source: CoinMarketCap)

At press time, BTC was trading hands at $97,803.55 after its price suffered a slight 0.58% price drop over the past 24 hours. The crypto king was still up by more than 8% on its weekly time frame.

Verbitskii suggested that as more traders enter the market, Bitcoin's price could potentially double during this bull run to reach $180,000 by the end of 2025. Verbitskii did warn that achieving these price levels will take some time, and predicted that the peak of this cycle could be realized over the next two years. He also advised traders to manage risks through diversification, limit orders, and options to mitigate losses during market downturns.

Verbitskii believes that Bitcoin’s decreasing block subsidy from the April 2024 halving, coupled with future halvings and lost coins due to forgotten passwords or misplaced wallets, could create a supply shock that will maintain high price volatility. He explained that Bitcoin becomes increasingly scarce each year as fewer coins are mined, and the limited supply could lead to a scenario where demand greatly outpaces availability. This imbalance could trigger rapid price acceleration and elevated volatility.

In June of 2024, Bitcoin exchange reserves dropped to a three-year low. This trend continued, with reserves reaching another low in August of 2024. November saw even more pressure on Bitcoin’s already constrained supply due to heightened demand driven by the U.S. presidential election and macroeconomic factors. Jesse Myers, co-founder of Onramp Bitcoin, pointed out that the reduced block subsidy was a key catalyst for an impending Bitcoin supply shock, which supports the possibility of the asset’s price nearing $100,000 and beyond even more.

US Bitcoin ETFs Shine

Spot Bitcoin exchange-traded funds (ETFs) in the United States recorded their fourth-largest week of inflows, totaling $2.42 billion between Nov. 18 and 22. This surge in inflows happened after Donald Trump’s victory in the 2024 presidential election, which catalyzed a Bitcoin rally that pushed its price to a record monthly candle gain of over 40%. It also helped Bitcoin to surpass $99,000 for the first time.

Weekly Bitcoin ETF flows (Source: Dune)

In contrast, China-based ETFs faced their largest weekly outflows in history, with more than $2 billion withdrawn during the same period. The iShares China Large-Cap ETF (FXI) alone saw $984 million in withdrawals, which made it its fifth consecutive week of outflows. 

These record outflows happened despite China’s government deploying economic stimulus measures to address worsening economic conditions. Consumer sentiment in China declined sharply, with confidence dropping nearly 50 points over the past three years, raising concerns about a potential economic depression.

Bitcoin’s price action historically benefited from economic turmoil, like the 2023 U.S. banking crisis that  triggered a major bull run. Despite China’s growing economic concerns, Bitcoin ETFs surpassed the $100 billion net asset milestone. However, some analysts predict that record stablecoin flows to exchanges, which totaled $9.7 billion in November, could propel Bitcoin past $100,000.

On the other hand, some analysts question the rally’s sustainability. Crypto.com CEO Kris Marszalek warned that the market might require deleveraging before Bitcoin can achieve new all-time highs again.

Pizza Day 2025 Could Cost $2 Billion

The story of Laszlo Hanyecz ordering two Papa John’s pizzas for 10,000 Bitcoin in 2010 became legendary in the crypto world. It is widely regarded as the first commercial Bitcoin transaction. 

The pizzas were valued at just $41 at the time, but now carry an astronomical opportunity cost of more than $978 million at current Bitcoin prices. In a 2019 interview, Hanyecz recalled posting on a forum to offer 10,000 Bitcoin for pizza. A fellow user accepted the offer, and the transaction was completed. This made May 22 ”Pizza Day” in the Bitcoin community.

Since then, the value of the 10,000 BTC grew exponentially during Bitcoin’s cyclical price surges. By Pizza Day of 2016, the BTC used for the pizzas was worth $4.4 million. By 2018, this figure had climbed to $41 million. In 2020, the opportunity cost reached over $80 million, and by 2022, it surpassed $300 million.

The bear market of 2023 briefly interrupted this trend, and reduced the value of the 10,000 BTC to $268 million. However, with Bitcoin once again on an upward trajectory, industry analysts predict a potential price of $180,000 per Bitcoin by 2025. If realized, the opportunity cost of Hanyecz’s infamous pizza purchase could approach $2 billion by Pizza Day 2025.