Coinbase’s Newly Launched Wrapped Bitcoin Token Hits $100M Market Cap

Coinbase has launched its wrapped Bitcoin token, reaching a $100 million market cap shortly after its debut.

Coinbase Wrapped BTC (cbBTC) is an Ethereum-based token backed by Bitcoin, designed to simplify users’ experience with decentralized finance (DeFi).

According to CoinGecko data, cbBTC began trading on September 12 and surpassed a $100 million market cap within 24 hours.

Coinbase has outlined how BTC holders can leverage cbBTC to enhance their DeFi interactions. By converting their Bitcoin into cbBTC, users can seamlessly use their assets in DeFi applications, such as providing liquidity or using it as collateral for borrowing crypto. The conversion process is automatic, with Bitcoin sent from Coinbase accounts to Base or Ethereum addresses being exchanged 1:1 for cbBTC, and the reverse occurring when receiving cbBTC back into Coinbase.

However, not everyone is supportive. Tron founder Justin Sun criticized cbBTC, calling it too centralized and lacking transparency. Sun expressed concerns about the absence of Proof of Reserve, audits, and the potential for account freezing, arguing that a government subpoena could seize all BTC linked to cbBTC.

At present, cbBTC ranks as the 402nd-largest cryptocurrency, with a market cap of just over $97 million.