Coinbase’s Wrapped Bitcoin Surpasses $100M Market Capitalization

Key Point Highlights

Coinbase’s cbBTC surpasses a $100M market capitalization just one day after its introduction.
Justin Sun, founder of TRON, criticized cbBTC for its absence of audits and centralization threats.

Coinbase’s recently launched wrapped Bitcoin token, cbBTC, has achieved a market cap of $100 million shortly after its launch on Ethereum and Base, based on analytics from Dune Analytics.

The circulating supply of Coinbase Wrapped Bitcoin now stands at 1,720 tokens, with approximately 42% located on Base and about 58% on Ethereum, as reported.

Released on Thursday, cbBTC reflects Coinbase’s commitment to expanding Bitcoin’s integration within DeFi applications. This new token directly competes with BitGo’s WBTC, which is recognized as the leading DeFi-enabled Bitcoin variant.

Following Coinbase’s announcement regarding the wrapped Bitcoin, Dan Elitzer, co-founder of Nascent, foretold that cbBTC would be a pivotal initiative for Coinbase. He believes that it may surpass BitGo’s WBTC supply within a half-year’s time.

Coinbase’s new token garnered favorable feedback from industry analysts at launch, particularly regarding its potential to enhance DeFi activities on Base, which is Coinbase’s layer 2 network.

Moonwell’s DeFi contributor Luke Youngblood indicated that the fungibility of cbBTC within Coinbase would facilitate the seamless integration of both retail and institutional Bitcoin holdings within its on-chain ecosystem.

According to Nansen CEO Alex Svanevik, Coinbase currently possesses about 36% of the total supply, with market maker Wintermute being among the primary holders. He expects that the token will significantly increase the total assets on Base through its swift adoption.

“This could explode total assets on [Base] quite quickly,” remarked Svanevik, expressing. “Smart decision. It appears Wintermute is the leading market maker for it. This will undoubtedly be a lucrative venture for them.”

Nevertheless, not every expert shares the same enthusiasm. Justin Sun, founder of TRON, voiced concerns about the token’s absence of Proof of Reserve audits and the potential for government oversight. He suggested that cbBTC might introduce risks to security within DeFi protocols, thereby jeopardizing decentralization.

“…the integration of cbBTC will greatly endanger security within decentralized finance. A single government subpoena could immediately freeze on-chain Bitcoin, rendering decentralization meaningless,” stated Sun, emphasizing.