Experts Believe Wrapped Bitcoin on Coinbase Could Dominate Market
Coinbase has provided a sneak peek into the imminent launch of cbBTC, a novel tokenized iteration of Bitcoin on its Base network. According to experts consulted by Decrypt, this move has the potential to revolutionize the realm of tokenized Bitcoin.
The unveiling of this new token, disclosed through a cryptic tweet early Wednesday, signifies Coinbase’s bold aspirations to broaden its tokenized asset portfolio and potentially reshape the sphere of wrapped Bitcoin.
As of now, Coinbase has not yet responded to requests for further details from Decrypt. The advent of cbBTC comes at a time when the demand for tokenized Bitcoin on Ethereum Virtual Machine (EVM)-compatible chains is on the rise.
It has been reported that nearly 156,608 BTC, valued at around $9.5 billion, has been tokenized and is currently in use across various decentralized finance (DeFi) ecosystems, as per CoinGecko data.
Coinbase’s entry into this domain with cbBTC could have a significant impact on market dynamics, especially considering the exchange’s reputable brand and established institutional custody solutions.
This move follows Coinbase’s launch of cbETH, a wrapped and staked Ethereum token, back in August 2022. The circulating supply of cbETH stands at approximately 210,000, representing two-thirds of the total 600,000 supply created in the past two years.
Jesse Pollak, the creator of Base, expressed optimism regarding the potential of Bitcoin on Coinbase’s layer-2 network.
Industry experts anticipate that the introduction of cbBTC will have profound implications for the cryptocurrency market, particularly within the DeFi sector.
Alvin Kan, COO of Bitget Wallet, believes that cbBTC is well-positioned to gain rapid market acceptance upon launch due to Coinbase’s strong reputation and custody services.
However, some experts are not convinced that cbBTC will immediately dominate the market. Jenny Zheng, chair of the non-profit organization Lady of Redecentralise, highlighted the deep integration and trust network of existing wrapped Bitcoin options like WBTC in the DeFi ecosystem.
Offering a broader perspective, Anndy Lian, an intergovernmental blockchain expert, opined that a new tokenized version of BTC would be well-received, leveraging Coinbase’s reputation and the trust it has garnered within the crypto community.
The partnership between BitGo, the company behind Wrapped Bitcoin, and BiT Global, associated with Tron founder Justin Sun, has sparked discussions in the crypto community. Sun has clarified his strategic involvement in WBTC and his lack of control over the private keys to the WBTC reserves.
In conclusion, the introduction of cbBTC by Coinbase has the potential to reshape the landscape of tokenized Bitcoin, with industry experts closely monitoring its impact on the market dynamics.
