Coinbase’s newly introduced Wrapped Bitcoin (CRYPTO:WBTC) token, cbBTC (CRYPTO:CBBTC), is rapidly gaining traction in the market, posing a challenge to Bitgo’s long-standing dominance.
Launched in mid-September 2024, cbBTC has reached a supply of 1,670 tokens.
This ERC20 token allows Bitcoin (CRYPTO:BTC) holders to engage with decentralised finance (DeFi) applications on both the Ethereum (CRYPTO:ETH) network and Coinbase's Base blockchain.
Cryptoquant researchers highlight that cbBTC is now the third-largest wrapped Bitcoin token, quickly climbing the ranks in a space historically led by Bitgo’s WBTC.
However, transparency concerns have surfaced around Coinbase’s handling of cbBTC, as it has yet to reveal the Bitcoin addresses holding the underlying assets.
This contrasts with Bitgo’s WBTC, which publicly lists the addresses containing the actual Bitcoin, allowing users to verify the existence of the coins on the blockchain.
Bitgo still leads the market with 153,000 WBTC in circulation, bolstered by partnerships and integrations aimed at maintaining its foothold.
Notably, Bitgo has teamed up with Bit Global, a regulated custody platform in Hong Kong, and integrated WBTC with the Tron blockchain, further strengthening its presence, particularly in Asian markets.
Despite cbBTC's rapid growth, Cryptoquant’s analysis points to potential risks with Coinbase’s centralised control over the underlying Bitcoin.
Additionally, the ability of cbBTC’s smart contract administrator to blacklist addresses has raised concerns about user autonomy.
At press time, the Coinbase Wrapped BTC (CBBTC) price was $63,004.86.