I think there are a couple of project already doing this. The one i am more familiar with is WBTC(Wrapped BTC or BTC on Ethereum network). The project started off in 2018, if i remember very well, It wasn't popular back then but the DeFi hype resurrected it.
What I don't like by this kind of arrangement is that more money is now going int ETH more than it's supposed to be for BTC -
Nearly $100M in Bitcoin Moved to Ethereum in July, Led by Retail Traders![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fstatic.coindesk.com%2Fwp-content%2Fuploads%2F2020%2F08%2Fmempool-july-1-710x458.png%3F&t=663&c=5zM3_shfdS21dw)
This consequently affects the price of BTC in general. For example since March, BTC price has risen by about x2 But Ether's price has risen by about x3.5