tl;dr
Coinbase's Wrapped Bitcoin (cbBTC) has rapidly reached a $1 billion market cap within 57 days of its launch, representing almost 10% of the Wrapped Bitcoin (WBTC) market cap. The majority of cbBTC's value is held on Ethereum, followed by Base Layer-2 blockchain and Solana. This growth reflects a tre...
Coinbase's Wrapped Bitcoin (cbBTC) has achieved a $1 billion market cap within 57 days of its launch, nearly constituting 10% of the Wrapped Bitcoin (WBTC) market cap. The majority of cbBTC's value is held on Ethereum, followed by Base Layer-2 blockchain and Solana. This growth mirrors the increasing demand for cross-chain compatibility in DeFi and the popularity of Bitcoin-pegged assets. However, Coinbase's approach to transparency and Proof of Reserves (PoR) has sparked controversy, with some expressing concerns over potential risks and the lack of standard reserve audits. Despite this, cbBTC presents a significant challenge to WBTC's market dominance, gaining traction in DeFi and attracting support as a "safer" wrapped Bitcoin option under Coinbase's backing. Coinbase’s Wrapped Bitcoin (cbBTC) has rapidly reached a $1 billion market cap within 57 days of its launch, representing almost 10% of the Wrapped Bitcoin (WBTC) market cap. The majority of cbBTC's value is held on Ethereum, followed by Base Layer-2 blockchain and Solana. This growth reflects a trend of increasing demand for cross-chain compatibility in decentralized finance (DeFi) and highlights a preference for Bitcoin-pegged assets. However, the rapid rise of cbBTC has ignited controversy over Coinbase's transparency and Proof of Reserves (PoR) approach, with critics raising concerns about potential risks and the lack of standard reserve audits. Despite this, cbBTC's ascent poses a significant challenge to WBTC's dominance in the market.
Coinbase’s Wrapped Bitcoin (cbBTC) has soared to a $1 billion market cap in just 57 days since its launch. This growth trajectory effectively represents almost 10% of the Wrapped Bitcoin (WBTC) market cap, which currently sits at $12.88 billion, according to CoinMarketCap. Data on Dune shows the cbBTC Bitcoin wrapper has a market capitalization of $1.04 billion as of this writing. The majority of this value is held on Ethereum at $855.43 million, followed by Base Layer-2 blockchain and finally Solana. Specifically, out of a total cbBTC supply of 14,678.95, over 12,000 are held on Ethereum. Meanwhile, Base and Solana hold 2,388 and 262 tokens, respectively. As a Bitcoin wrapper, cbBTC allows BTC to be represented on other blockchain networks. Its rise highlights an important trend: Ethereum-based assets experience faster net supply changes than other leading Bitcoin liquid staking tokens (LSTs). These include eBTC, solvBTC, BBN, and pumpBTC, among others. This swift growth, occurring just over two months after launch, signifies a notable demand for Coinbase’s wrapped Bitcoin product. The pace also reflects an escalating preference for cross-chain compatibility within decentralized finance (DeFi). It comes as users and protocols look for more accessible and flexible Bitcoin-pegged assets. Coinbase first revealed cbBTC’s planned debut on Base in mid-August. The product inadvertently presented as a prospective market rival to Wrapped Bitcoin (WBTC). The Bitcoin wrapper has also seen increased support and interest across decentralized finance (DeFi). The idea of a Bitcoin wrapper is to expand users’ access to BTC.
For instance, with cbBTC on Solana, holders can leverage the network’s reduced fees and high transaction speeds. These metrics are especially relevant for high-frequency DeFi transactions. Aave, a leading DeFi protocol, is already targeting cbBTC for its V3 Protocol. At inception, cbBTC drew attention from venture capitalists like Dan Elitzer. In August, the VC predicted that cbBTC would be “super strategic” for Coinbase. He also said it could outpace WBTC’s supply within six months. Indeed, Coinbase’s cbBTC’s advent came against the backdrop of the WBTC controversy involving Justin Sun. WBTC, once the go-to solution for wrapped Bitcoin on Ethereum, has faced growing skepticism due to concerns over its management and transparency under Justin Sun’s influence. The rapid rise of cbBTC has not been without controversy. Coinbase’s approach to transparency and Proof of Reserves (PoR) has invited scrutiny. Critics, in particular, remain a bone of contention. Duo Nine, a popular user on X, warned that Coinbase’s reliance on users’ trust without providing concrete proof of BTC reserves could lead to a collapse similar to the FTX downfall. This outcome, he articulated, was contingent on Coinbase minting more cbBTC than it could back. Justin Sun echoed the sentiment, raising questions regarding Coinbase’s decision to forgo standard reserve audits for cbBTC. The Tron executive argued that this lack of transparency introduces significant risk. Against such fears, Coinbase’s custodial practices came into question, prompting BlackRock to revise its custody agreement with the exchange. This unease may have steered users towards alternatives