Synthetic BTC market share shifts as cbBTC supply tops 30K while wBTC slides

The Block

Aug 22, 2025 06:31:01

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The synthetic BTC landscape has seen a notable shift as of late, with Coinbase's cbBTC being the fastest-growing synthetic BTC offering on Ethereum.

Synthetic BTC, such as wBTC or cbBTC, are 1:1 BTC-backed tokens issued on other chains that can be used as collateral or liquidity in DeFi, without using the Bitcoin network itself. Since Coinbase first launched cbBTC in September 2024, its supply has grown from 1,000 worth of synthetic bitcoins to over 30,500 cbBTC at the time of writing. Moreover, the cbBTC supply has also increased by over 160% year to date.

Meanwhile, the largest synthetic BTC product on Ethereum, wBTC, has seen its supply decline by 17% since the launch of cbBTC, while also being down 4% year to date.

Interestingly, since cbBTC’s launch in mid-September, the total supply of synthetic BTC on Ethereum has only gone up by ~3%. This indicates that while cbBTC itself has experienced notable growth over the past year, it has been more so a result of a market share shift inside the total synthetic-BTC stack, as opposed to outright net new synthetic BTC moving into Ethereum.

Notably, backlash against WBTC began fomenting in August 2024 after issuer BitGo announced a Justin Sun-related affiliate would be taking a greater role in managing the asset, including signing on as one of the key signatories to the wBTC multisig. Coinbase later delisted wBTC, which opened up a legal challenge that was later dropped.

In other words, a large portion of cbBTC’s growth on Ethereum since its inception has likely been due to substitution and migrational flows away from wBTC. The reason for cbBTC’s growth is likely due to Coinbase being able to funnel BTC holders directly into cbBTC through its existing custody, prime brokerage, and exchange rails. This means fewer hops and lower operational friction than third-party mints, making cbBTC the path of least resistance for institutions and treasuries that already clear through Coinbase.

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