– Bitcoin is currently underperforming in the market, following the price losses due to the bear market. – Yet, off-chain uses are increasing rapidly. – This trend suggests growth and adoption in Bitcoin, irrespective of the price actions.
Off-chain bitcoin transactions simply refer to transfers made outside Bitcoin's base blockchain. It's possible through over-the-counter deals, peer-to-peer trading, synthetic bitcoins, including Lightning services.
Off-chain bitcoin transactions across different mediums have been increasing despite prices dropping. Although off-chain data is often overlooked as a less important metric, it helps measure Bitcoin's overall growth and use.
The number of Synthetic or tokenized bitcoins has increased significantly on Ethereum and other blockchains. Particularly, the ERC-20 Wrapped Bitcoin (WBTC) has grown immensely since BitGo launched it.
Besides WBTC, there are other related Bitcoin tokens launched, each with features less or more similar. Some of the popular tokens with a decent supply include tBTC, pBTC, renBTC, and more.
Although these tokens don't contribute to Bitcoin's base layer, they are an extension of Bitcoin itself. Bitcoin's blockchain doesn't support smart contract functionality like Ethereum, which limits its capabilities.
However, the introduction of these synthetic products helps extend Bitcoin's reach to smart contract-enabled blockchains. This enables Bitcoin holders the opportunity to participate in decentralized finance services using the tokenized Bitcoins. Practically, synthetic Bitcoin products are good for adoption.
Tokenized Bitcoins will continue to exist the fact that Bitcoin's blockchain isn't smart contract-enabled. We might even see a rapid increase in the tokens' supply and usage as DeFi services and protocols continue to grow and support them.
This ultimately would prove a growing demand and adoption of Bitcoin off-chain, which is likely to continue not minding the condition of the market.
Off-chain Bitcoin transactions are another important measure to determine the rate of Bitcoin usage. And while such transactions don't count on the Bitcoin blockchain, they prove an existing demand for the king cryptocurrency in other blockchains like Ethereum, Solana, etc.