Crypto exchange Coinbase joined the wrapped Bitcoin race only a week ago, on Sept. 12, but accumulated nearly 2,000 tokens in circulating supply so far, potentially challenging the dominance of long-established players.
According to data from CryptoQuant, cbBTC has grown in seven days to be the third-largest wrapped Bitcoin (BTC) token, surpassing tokens that have been in circulation since 2020, such as Huobi BTC (HBTC) and renBTC (RENBTC).
To put it in perspective, BitGo’s wBTC — the first wrapped Bitcoin token launched in 2019 — took over a year to achieve similar figures. Still, it continues to dominate the wrapped BTC market, with nearly 153,000 tokens in circulation at the time of writing, far outpacing its closest competitor, tBTC, which has around 3,400 tokens.
Wrapped BTC tokens are tokenized versions of Bitcoin that allow holders to trade, lend, and liquidate it in decentralized financial applications (DeFi). Coinbase’s large BTC holdings on its platform could help it gain a greater share of the wrapped tokens market. According to CryptoQuant’s analysis:
“The potential growth for cbBTC is large as Coinbase exchange’s users hold more than 1 million Bitcoin on the platform (excluding Bitcoin in custody and ETF holdings).”
Much of cbBTC’s supply (64%) is based on Ethereum and used on decentralized exchanges like Uniswap — usually as collateral in pools against different trading pairs. Another 26% is held directly in the Coinbase exchange and its network, Base.
Related: BitGo CEO argues wBTC security is unchanged amid concerns
For Coinbase, cbBTC benefits include enhancing fees generated on its layer-1 blockchain Base. Fees revenue collected by the exchange increased 148% from last year to $53 million during the second quarter of 2024.
Source: CryptoQuant
The wrapped token race has led BitGo to expand its wBTC presence across networks and geographies over the past few weeks. Earlier this month, the company adopted LayerZero’s Omnichain Fungible Token (OFT) Standard to allow the asset to be used across multiple blockchain networks, with initial rollout on Avalanche and BNB Chain.
In addition, BitGo has recently announced a joint venture with BitGlobal, a regulated custody platform based in Hong Kong, deepening its regional presence in Asian markets.
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