Hey crypto enthusiasts! Big news from the world of Wrapped Bitcoin—Coinbase has just thrown its hat into the ring with its own token, cbBTC, and it's already making waves. Launched on September 12, cbBTC has rocketed to become the third-largest Wrapped Bitcoin in just a week. Talk about a strong debut!
The Wrapped Bitcoin market is heating up, and it looks like Coinbase, America's top crypto exchange, is ready to play ball. Experts are buzzing that this could mean more user engagement, better cross-chain liquidity, and some serious growth for the market in the coming years.
But hold your horses, because it's not all smooth sailing. A recent report from CryptoQuant hints that some investors might be a bit wary of certain tokens due to the way they're managed by custodians. So, there’s a bit of drama unfolding here.
For those new to the concept, Wrapped Bitcoin tokens let you use your BTC on other networks and decentralized finance (DeFi) apps without actually selling your precious Bitcoin. They're backed 1:1 with BTC and primarily live on Ethereum. The OG in this space, WBTC, was launched in 2019 by BitGo and still holds the crown with a whopping 153,000 tokens in circulation.
Since then, we’ve seen a few more players enter the game, like HTX exchange’s HBTC, the Threshold Network’s tBTC, and the Ren Protocol’s renBTC. Coinbase's cbBTC is the freshest face on the block, found on both Ethereum and Coinbase’s layer-2 protocol, Base.
In just a week, cbBTC has soared past HBTC and renBTC, grabbing the third spot. CryptoQuant analysts noted that 64% of cbBTC’s supply on Ethereum is chilling on Uniswap, adding liquidity to various trading pairs like cbBTC/WBTC and cbBTC/USDC. As of now, there are about 1,670 cbBTC tokens in circulation, valued at a cool $101 million.
But not everyone is throwing confetti. Some community members are raising eyebrows because, unlike BitGo, Coinbase isn’t sharing the addresses holding the BTC backing cbBTC. This means you can’t independently verify that the BTC is actually there. Plus, the cbBTC smart contract administrator has the power to blacklist addresses, which could freeze users' holdings. Yikes!
So, while cbBTC is opening up a world of financial opportunities—think trading, lending, borrowing, and yield farming on DEXs—there are some trust issues that Coinbase will need to address. Stay tuned, folks; this story is just getting started!
