- Coinbase teases the launch of its wrapped Bitcoin, cbBTC
- It could enable one more way for Bitcoin storage on Ethereum and Layer 2 networks
- cbBTC might compete with the leading wrapped Bitcoin (WBTC) from BitGo
Coinbase, one of the leading cryptocurrency exchanges, is hinting at a major Bitcoin-related move with the potential launch of its cbBTC.
Coinbase’s Potential in the Tokenized Bitcoin Market
Coinbase made a very brief statement on X regarding the upcoming launch of their wrapped Bitcoin version, and the crypto community is eagerly speculating about what’s to come.
cbBTC, named similarly to Coinbase’s Ethereum staking derivative product, cbETH, is expected to be Coinbase’s version of wrapped Bitcoin, allowing it to be stored on Ethereum and Layer 2 networks.
Since direct Bitcoin storage on these networks is impossible, effective solutions for this are highly demanded and could greatly expand the capabilities of the DeFi ecosystem, especially on Coinbase’s base blockchain, which is positioned as an incubator for blockchain innovations.
Coinbase’s cbBTC vs. BitGo’s Wrapped Bitcoin (WBTC)
It’s clear that cbBTC will directly compete with WBTC, one of the largest similar solutions on the market, with a market cap exceeding $9 billion.
BitGo, the custodian of WBTC, has not yet commented on the upcoming competition but recently announced a strategic partnership with Hong Kong-based BiT Global, which involves Tron founder Justin Sun.
According to their statements, this partnership aims to expand and strengthen the company’s position and implement “multi-jurisdictional and multi-institutional custody” for the WBTC business.
Additionally, in light of these developments, the MakerDAO risk team, Block Analitica Labs, proposed suspending new borrowings collateralized by WBTC. In response, BitGo CEO Mike Belshe emphasized the firm’s commitment to security and regulatory oversight.
Conclusion
As Bitcoin adoption continues to grow, more key players in the crypto industry are eager to develop solutions around it.
This could mean that this is far from the last showdown, but if it turns out to be what we suspect, the competition promises to be intense and large-scale.
We’re looking forward to a detailed announcement with technical specifics and, of course, the actual release. Stay tuned.
