The Coinbase Wrapped Bitcoin will operate as an ERC20 token backed 1:1 with BTC held by the exchange on behalf of the users.

Key Notes

  • Coinbase exchange has launched a wrapped version of Bitcoin on Ethereum and Base.
  • The Coinbase cbBTC will be backed up in a ratio of 1:1 and usable on different DeFi platforms.

Coinbase Global Inc (NASDAQ: COIN), a top-tier cryptocurrency exchange offering services to both retail and institutional investors, has today launched the Coinbase Wrapped BTC, cbBTC. According to the announcement, the cbBTC will run on the Ethereum (ETH) network and layer-two (L2) scaling solution Base as an ERC20 token.

The company confirmed that the cbBTC will be fully backed with Bitcoins at a ratio of 1:1. The launch of the cbBTC will play a crucial role in the mainstream adoption of Bitcoin through different web3 protocols that run on Ethereum or taps on EVM-compatible chains.

“When Coinbase users send their BTC from Coinbase to an address on Base or Ethereum, that BTC will automatically be converted 1:1 to cbBTC. When users receive cbBTC in their Coinbase accounts, it will be converted 1:1 from cbBTC to BTC,” Coinbase noted.

At launch, the cbBTC will be available in the United States except in New York, the United Kingdom, Singapore, Australia, and Brazil. As a result, more users can transact using Bitcoin at a faster speed and cheaper cost.

Already, the cbBTC is available on severely DeFi protocols including Aerodrome, Aave, DeBridge, DeFinitive, Morpho, Chronicle Labs, and Maple, among others.

Market Impact of Coinbase Wrapped BTC Launch

The launch of the cbBTC will play a crucial role in the democratization of Bitcoin around the world. Moreover, Coinbase has earned a huge reputation as a reliable cryptocurrency exchange and institutional-grade storage. As a result, Bitcoin will in the future further compete with other crypto projects in the DeFi space.

The company highlighted that plans are in place to integrate the cbBTC with other networks in the market.

The launch of the cbBTC will increase the overall trading volume for Bitcoin and Coinbase in turn. Consequently, Coinbase shareholders will significantly benefit from the revenue collection.

Notably, Coinbase shares gained 1.45 percent on Thursday to trade around $159.26 at the time of this report.

According to the company’s website, the total crypto-traded volume was about $226 billion in the second quarter of 2024. The company has significantly benefited from the partnerships with the spot Bitcoin ETF issuers to custody their BTCs. As of this report, Coinbase held a total of $269 billion worth of digital assets for its customers.

Meanwhile, the value addition of the Bitcoin network will play a crucial role in the ongoing bullish outlook. As Coinspeaker explained, Bitcoin price is currently sitting on a major support level above $57K, which could yield a significant bullish breakout in the near term.

Moreover, the US Fed is expected to initiate the first interest rate cut next week, following the gradual decline in inflation.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.


Cryptocurrency News, News

Steve Muchoki

Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology.
Let us all WIN!

Steve Muchoki on LinkedIn

American Crypto Association Exclusives!

Bookmark the site and sign up for relevant alerts, trading tips, masternode updates and important news hosted within our exclusive newsletter. Valued at $3,588, we are offering this service free for one year!

Get onboard now!

Exclusive Newsletter!

Sign up for exclusive trading tips, masternode updates and important news hosted within our newsletter!
!
!
Terms and Conditions checkbox is required.
Something went wrong. Please check your entries and try again.
Translate »