Coinbase’s Wrapped Bitcoin (cbBTC) has reached a market cap of $1 billion just 57 days after its launch.
This growth trajectory represents almost 10% of the market value of Wrapped Bitcoin (WBTC), which currently stands at $12.88 billion, according to CoinMarketCap.
Coinbase’s cbBTC hits $1 billion market cap
Data on Dune shows that cbBTC has a market cap of $1.04 billion at press time. The majority of this is held by Ethereum, at $855.43 million, followed by Base and finally Solana.
Specifically, of the total cbBTC supply of 14,678.95, more than 12 thousand are held on Ethereum. Meanwhile, Base and Solana hold 2,388 and 262 tokens, respectively.
Read more: Bitcoin Price Prediction 2024/2025/2030
Coinbase cbBTC Bitcoin Wrapper Supply and Market Cap Chart. Source: Dune
cbBTC enables Bitcoin to be represented on other blockchain networks. Its rise highlights an important trend: Ethereum-based assets experience, for example, faster changes in liquid supply than other leading Bitcoin liquid staking tokens (LSTs) such as eBTC, solvBTC, BBN, and pumpBTC, among others.
The network effect is unbeatable. They can offer cashback/discount/deals to MMs/Funds in their diversified line of business to drive liquidity, adoption very easily, said Tom Wan, on-chain data researcher.
This rapid growth, occurring just over two months after launch, signals significant demand for Coinbase’s product. The pace also reflects a growing preference for cross-chain compatibility within decentralized finance (DeFi).
Users looking for Bitcoin-linked assets
This comes as users and protocols seek more accessible and flexible Bitcoin-pegged assets. Coinbase first revealed the planned debut of cbBTC on Base in mid-August. The product was inadvertently introduced as a potential market rival to Wrapped Bitcoin (WBTC). It has also seen a surge in support and interest in decentralized finance (DeFi).
The idea behind wrapping Bitcoin is to expand users’ access to BTC. For example, with cbBTC on Solana, holders can take advantage of the network’s low fees and high transaction speeds. These metrics are especially relevant for DeFi transactions. Aave, for example, is already targeting cbBTC for its V3 Protocol.
Early on, cbBTC attracted the attention of venture capitalists like Dan Elitzer. In August, the VC predicted that the token would be “super strategic” for Coinbase. He also said that it could surpass WBTC’s supply within six months.
I'm actually surprised they didn't release this years ago, Elitzer commented.
Furthermore, he also emphasized that the introduction of cbBTC could encourage DeFi users to seek out more decentralized Bitcoin wrapped options, given the “mismanagement” of WBTC by Justin Sun-affiliated management.
Controversy marked the launch of cbBTC
The arrival of Coinbase's cbBTC comes amid a controversial backdrop involving Justin Sun. WBTC, once the preferred solution for wrapping Bitcoin on Ethereum, has faced increasing skepticism due to concerns over its governance and transparency under Sun's influence.
The rapid rise of cbBTC has not been without controversy. Coinbase's approach to transparency and Proof of Reserves (PoR) has been questioned. Thus, critics, in particular, remain a point of contention.
Read more: Coinbase – discover one of the largest exchanges in the world
Duo Nine, a crypto analyst at X, warned that Coinbase's reliance on user trust without providing concrete proof of BTC reserves could lead to an FTX-like collapse. This outcome, he articulated, was conditional on Coinbase issuing more cbBTC than it could support.
They will not provide any proof of reserves for the BTC they *claim* to have, nor any proof of backing for their new paper BTC called cbBTC. If they print too much paper BTC, they will go the way of FTX, Duo Nine said.
Justin Sun echoed the sentiment, raising questions about Coinbase’s decision to waive standard reserve audits for cbBTC. The Tron executive argued that this lack of transparency introduces significant risk. Given these concerns, Coinbase’s practices have come under fire, prompting BlackRock to review its custody arrangement with the exchange.
This uneasiness may have driven users to alternatives, which some consider a “safer” wrapped Bitcoin option with the backing of Coinbase. As cbBTC attracts more support, it poses a growing threat to WBTC’s long-standing dominance. However, even if it doesn’t overtake its main competitor, its rapid growth signals a significant shift in user preferences within DeFi.
The article Wrapped Bitcoin reaches US$1 billion in market capitalization in 57 days was first seen on BeInCrypto Brasil.
