Ethena Labs has added bitcoin as a backing asset for its USDe synthetic dollar, as traders embrace a resurgence in the world’s oldest digital asset.

The decentralized finance (DeFi) protocol said Thursday in a series of posts on X that backing USDe with bitcoin will enable its dollar-pegged token to scale by a factor of more than 2.5, as well as make its products safer for traders. The move comes as bitcoin derivative markets outpace their ether-based equivalents.

“As Ethena scales closer towards $10bn this provides a more robust backing, and ultimately a safer product for users,” the protocol said Thursday. USDe’s current supply is worth roughly $2 billion, it added.

Ethena also pointed to bitcoin's superior liquidity and duration profile for delta hedging compared to liquid staking …