Coinbase’s wrapped bitcoin product initially rolled out on Ethereum’s parent chain and L2 network Base.
The market cap of cbBTC has jumped 23% over the last seven days.
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Posted November 7, 2024 at 4:50 pm EST.
Coinbase’s cbBTC—a tokenized representation of bitcoin on other networks—crossed the $1 billion market cap threshold on Wednesday. Less than 24 hours later, the Solana Foundation announced that Coinbase had deployed cbBTC on Solana.
The market cap of Coinbase’s cryptocurrency pegged to the price of bitcoin has grown 23% in the last seven days from $840 million to $1 billion at presstime, outpacing BTC’s 9.5% jump over the same period, data from CoinGecko shows.
The Solana Foundation, the nonprofit organization dedicated to the Solana blockchain, said Thursday afternoon ET that Coinbase had launched cbBTC on the network, joining a number of other wrapped bitcoin tokens such as Threshold Network’s tBTC, BiTGlobal’s WBTC, Zeus Network’s zBTC, and Stacks’ sBTC.
As an asset that can be used as liquidity for exchanges and collateral for lending in the DeFi ecosystem, Coinbase’s cbBTC allows people to bring bitcoin’s value into Solana. Currently, Coinbase’s cbBTC on Solana has a supply of 135.6 bitcoins worth about $10.4 million and is distributed across 111 holders, according to block explorer Solscan.
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“With major players like Coinbase integrating Solana assets, liquidity aggregation is on the rise, reinforcing Solana’s role as a leading platform for institutional trading and digital assets,” wrote Suki Yang, founder of Solana-based memecoin platform LMAO, in a Telegram message to Unchained.
cbBTC originated on Ethereum and Coinbase’s L2 network Base in September, roughly a month after the custodian of WBTC, BitGo, announced a new partnership with Tron founder Justin Sun.
Since launching, cbBTC has helped drive economic activity to both Base and the network’s largest exchange Aerodrome, Arthur Cheong, the founder and CEO of crypto investment firm DeFiance Capital, wrote in an essay on X on Thursday. Currently, nine Aerodrome smart contracts contain roughly 530 bitcoins worth about nearly $40.6 million at current prices, making up 23.3% of the cbBTC’s supply on Base, according to blockchain analytics firm Nansen.
“Aerodrome is the largest beneficiary of this development given that they consistently command ~80% of trading volumes on cbBTC pairs,” Cheong wrote. “This comes as no surprise to us as cbBTC on-chain is fungible with BTC on the Coinbase CEX, which would drive CEX / DEX arbitrage flows. With Aerodrome being the largest and most liquid venue for cbBTC on-chain, they naturally should facilitate most of the flows.”
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Given the success of cbBTC on other networks, Solana builders such as Kamino co-founder Marius Ciubotariu have supported cbBTC’s rollout. “There is absolutely no reason why DeFi with BTC shouldn’t happen on Solana and Kamino is going to do everything possible to make that happen,” Ciubotariu wrote on X on Thursday.
Coinbase’s stock price has increased more than 40% from $181 at the start of November to $254 at presstime, according to Yahoo Finance. “[The] general market sentiment with crypto has been going up a lot. Coinbase stock is an index for [the] crypto market,” added Yang.
