The venture between BitGo and BiT Global highlighted the lingering distrust many Bitcoin holders have towards centralized custody, according to a new report. Many users of the Bitcoin token wBTC (WBTC) were disappointed to learn that its issuer, BitGo, was sharing custody of their BTC with BiT Global. While the incident didn't reveal any new vulnerabilities, the Bitcoin Builders Association (BBA) stated in a report that it 'reopened old wounds inflicted by previous centralized custody failures.
' As a result, the BBA observed that these events make BTC holders reluctant to relinquish their self-custody for trusted solutions. The report also noted a growing trend of distrust towards centralized entities. WBTC's supply has decreased to 0.74% of the total circulating Bitcoin supply from 1.5% two years ago. WBTC, an Ethereum-based token exchangeable 1:1 for BTC, enables users to utilize their assets in the decentralized finance (DeFi) world, which is largely absent in the Bitcoin ecosystem. Despite being the market leader in the tokenized BTC sector with a 60.4% share, according to the BBA, this dominance could be challenged. The BBA reported that 40% of the 21 participants in this sector have launched in 2024 or plan to do so soon, indicating a potential shift in the landscape