Crypto data sites are double-counting tokenized Bitcoin, with three BTC tokenization protocols representing more than 1.4% of the reported altcoin market cap.
Tokenized Bitcoin is booming, with the increasing demand from DeFi combined with BTC’s recent meteoric price rise has resulted in three Bitcoin tokenization protocols ranking among the 70 largest crypto markets.
According to popular market data aggregators CoinGecko and CoinMarketCap, Wrapped Bitcoin (WBTC) currently ranks as the 13th-largest market boasting a capitalization of $4.04 billion, with roughly 0.6% of Bitcoin’s supply currently locked in the protocol. Huobi BTC (HBTC) ranks 56th with a market cap of $660 million, followed by the 63rd-ranked renBTC (RENBTC) with a capitalization of $510 million.
However, the emergence of Bitcoin (BTC) tokenization protocols as top-ranked crypto markets is problematic for data aggregators as it risks double-counting a portion of Bitcoin’s supply when estimating the total market capitalization of the crypto sector.
At the time of publication, WBC, HBTC, and RENBTC represent more than 1.4% of the combined crypto capitalization excluding Bitcoin, according to bothCoinGecko and CoinMarketCap.
With many analysts expecting Bitcoin to continue pushing into new all-time highs, and the DeFi sector’s appetite for tokenized BTC growing significantly in recent months, the share of crypto capitalization represented by Bitcoin tokenization services is likely to keep expanding.
Speaking to Cointelegraph, CoinGecko COO and co-founder Bobby Ong confirmed that “the tokenized BTC market capitalization […] is included in the total cryptocurrency market capitalization calculation” provided by his company. He added:
“We are aware of the double-counting issue and have an internal to-do to try to correct for this issue […] This was a phenomenon that has become more prevalent in the past year as more and more tokenized assets are created on Ethereum. We hope to have a solution for this out soon.”
Bitcoin currently represents more than 65% of the combined crypto capitalization.
Cointelegraph contacted CoinMarketCap for comment, but did not receive a response as of press time.