Circle Internet’s (CRCL) wrapped version of Bitcoin, cirBTC, is live on Ethereum as the company best known for its dollar-pegged stablecoin takes on Coinbase (COIN) for synthetic dominance. $BTC walk.
The New York-based company said it developed cirBTC, a token backed 1:1 by the world’s largest cryptocurrency, to allow traders to access their bitcoin wealth in decentralized finance (DeFi) protocols, including lending, decentralized exchanges (DEX), tokenized assets and stablecoins.
Synthetic or wrapped Bitcoin tokens exist to address the historical lack of provisions for DeFi activities on the Bitcoin network. Many cryptocurrency users prefer to only hold bitcoins because they are worth more than all other cryptocurrencies combined. But using it for DeFi is difficult because Bitcoin lacks the native programmability of networks like Ethereum.
The first token to break the barrier, wrapped bitcoin (wBTC), was introduced in 2019 and remains the largest, with a market capitalization of around $7.3 billion. Coinbase’s cbBTC (COIN), which appeared in 2024, is worth just under $5.4 billion.
Circle offers circBTC to institutions that can focus their crypto allocation on $BTC and know the company and trust its infrastructure due to its visibility in the stablecoin market. Circle’s USDC is the second largest stablecoin in the market with a cap of over $75 billion.
The introduction of cirBTC could see Circle clash with Coinbase and wBTC’s primary custodian, BitGo Holdings (BTGO), for dominance in the institutional synthetic sector. $BTC walk.
The market capitalization of all synthetic Bitcoin tokens combined ranges between $12.5 billion and $13.5 billion, which represents approximately 1% of the total Bitcoin value of approximately $1.25 trillion.
