Coinbase cbBTC could challenge BitGo’s WBTC supply in 6 months Coinbase cbBTC could challenge BitGo’s WBTC supply in 6 months
Crypto community members believe that Coinbase's cbBTC will disrupt the market reliance on WBTC.
2 min read
Updated: Aug. 14, 2024 at 2:08 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Coinbase appears poised to enter the wrapped Bitcoin market following recent disclosures from the firm.
On Aug. 13, Coinbase’s official X (formerly Twitter) account teased an upcoming product with a post saying “cbBTC,” followed by “coming soon.” Head of Corporate and business development at Coinbase Ventures, Shan Aggarwal, commented, it had been “hard to keep this under wraps.”
While details about the product remain scarce, Jesse Pollak, lead developer of Coinbase’s Base network, has hinted at plans to create a substantial Bitcoin economy on the Ethereum Layer-2 network.
He stated:
“To say it out loud: I love bitcoin, [I’m] so grateful for it’s role [in] kickstarting crypto, and we’re going to build a massive bitcoin economy on Base.”
Dan Elitzer, the co-founder of the venture capital firm Nascent, suggested that cbBTC would be strategically crucial for the crypto company. He speculated that the new product could surpass BitGo’s current Wrapped Bitcoin (WBTC) supply within six months of its launch.
According to him:
“cbBTC was inevitable and super strategic to Coinbase. Frankly, I’m surprised they didn’t ship this years ago.”
This sentiment was echoed by DCinvestor, a pseudonymous crypto investor, who believes Coinbase could leverage cbBTC to convert its Bitcoin holders into users of Base and Ethereum.
WBTC troubles
Coinbase’s announcement about cbBTC comes amid recent controversy surrounding Tron founder Justin Sun‘s involvement with BitGo’s WBTC.
On Aug. 9, BitGo revealed plans to transfer WBTC management to a new joint venture involving itself, Hong Kong-based investment manager BiT Global, and Sun. This decision stirred significant backlash within the crypto community, with concerns primarily focused on Sun’s involvement.
Despite these concerns, BitGo CEO Mike Belshe and Sun have maintained that the crypto entrepreneur’s role in the new venture was purely strategic.
Sun stated:
“The minting process is entirely managed by the custodians Bitglobal and Bitgo following the same procedures as before. In simple terms, Bitglobal and Bitgo will not sign any unaudited transactions. The keys are still safeguarded using the same Bitgo cold wallet technology and offline keys, with backups in multiple countries and regions.”
Nevertheless, Elitzer criticized the move, suggesting that no experienced DeFi user or risk manager would want to retain exposure to WBTC under Sun’s influence.
He also noted that this shift in management could lead to significant disruption, prompting various protocols and platforms to support alternative bridged BTC solutions.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,462.84
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Bitcoin
$97,366.86
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Wrapped Bitcoin
$66,036.62
Wrapped Bitcoin delivers the power of Bitcoin with the flexibility of an ERC20 token.
BitGo
BitGo is a market leader in institutional-grade cryptocurrency investment services, providing institutional investors with security, compliance, and custodial solutions for blockchain-based currencies.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Mike Belshe is a co-founder and CEO at BıtGo, an institutional-grade digital asset financial services company, headquartered in Palo Alto, California that was founded in 2013.
Justin Sun has carved a name for himself as a leading figure in the blockchain sector.