Wrapped Bitcoin (WBTC) has maintained its position as the largest BTC derivative project by market capitalization since its inception in 2019 by Bitgo. Despite this achievement, the number of wrapped bitcoins in circulation has significantly decreased over the past few years, with over 32% of its supply being redeemed since November 2021.

WBTC currently ranks as the 15th largest crypto asset by market valuation, according to (link unavailable), a cryptocurrency market aggregator. Its market capitalization stands at $10.5 billion, with a global trade volume of $91.32 million over the past 24 hours. Each WBTC coin is backed 1:1 by bitcoin (BTC), allowing users to utilize BTC on the Ethereum blockchain and within decentralized finance (DeFi) applications.

Bitgo acts as the custodian for the BTC backing the units, and by 2021, the supply of WBTC had crossed the 200,000 mark. However, the number of wrapped bitcoins in circulation has been declining steadily. As of November 5, 2021, there were approximately 231,659 WBTC in circulation, which has decreased to 155,849 WBTC as of this weekend. This represents a redemption of 75,810 coins over the past few years. The downward trend has persisted, with 5,723 tokens redeemed between November 27, 2023, and the following weekend, bringing the total number of wrapped bitcoins to 161,572.

The decline in WBTC supply can be attributed to various factors, including the redemption of WBTC by crypto lenders like Celsius, which has led to a significant burn of WBTC tokens. Additionally, the decrease in demand for WBTC due to the bear market and crypto contagions has contributed to the decline in its supply.

Despite the decline in supply, WBTC remains a crucial player in the DeFi ecosystem, offering a bridge between the Bitcoin and Ethereum networks. Its integration into the world of Ethereum wallets, decentralized applications, and smart contracts provides an added advantage to its users. However, the recent burn of WBTC tokens and the decline in its supply have raised concerns about the viability of synthetic tokens like WBTC as a mode of value transfer.

In conclusion, Wrapped Bitcoin (WBTC) has maintained its dominance as the largest BTC derivative project despite the decline in its supply. Its integration into the DeFi ecosystem and its ability to bridge the gap between Bitcoin and Ethereum make it a vital asset in the cryptocurrency market. However, the recent decline in its supply and the concerns surrounding synthetic tokens like WBTC highlight the need for caution and further research into the viability of such assets.