Circle debuts cirBTC on Ethereum to challenge Coinbase in the wrapped bitcoin market
Circle unveiled cirBTC, a token backed 1:1 by the world’s largest cryptocurrency, to allow traders to use their bitcoin wealth in DeFi protocols.
What to know:
- Circle’s wrapped version of bitcoin is live on Ethereum as the stablecoin company takes on Coinbase for dominance of the synthetic BTC market.
- Circle is pitching cirBTC to institutions that focus their crypto allocation on bitcoin and may be familiar with Circle and trust its infrastructure because of its position in the stablecoin market.
- Total synthetic bitcoin market cap hovers between $12.5 billion and $13.5 billion, demonstrating it is still a niche area.
Synthetic, or wrapped, bitcoin tokens exist to address the historical lack of provision for DeFi activities on the Bitcoin network. Many cryptocurrency users prefer to hold only bitcoin because it is worth more than every other crypto combined. But using it for DeFi is challenging because that Bitcoin lacks the native programmability of networks like Ethereum.
The first token to cross the divide, wrapped bitcoin (wBTC), was introduced in 2019 and remains the largest, with a market cap of around $7.3 billion. Coinbase’s (COIN) cbBTC, which appeared in 2024, sits at just under $5.4 billion.
Circle is pitching cirBTC to institutions that may focus their crypto allocation on BTC and are familiar with the company and trust its infrastructure due to its visibility in the stablecoin market. Circle’s USDC is the second-largest stablecoin on the market with a cap of over $75 billion.
