Shifts in Synthetic BTC Market Share

Recent developments show a significant shift in the synthetic BTC market, with Coinbase's cbBTC emerging as the fastest-growing option on Ethereum. These synthetic BTC tokens, including wBTC and cbBTC, are backed 1:1 by BTC, enabling their use in DeFi platforms without relying on the Bitcoin network. Since its launch in September 2024, cbBTC's supply has surged from 1,000 to over 30,500 tokens, marking a striking 160% increase in just one year. Conversely, the supply of wBTC, the leading synthetic BTC product on Ethereum, has decreased by 17% since cbBTC's introduction, and it has also dropped 4% year to date. Interestingly, although the total supply of synthetic BTC on Ethereum has risen by only ~3% since cbBTC's debut, this increase signals a market shift rather than new synthetic BTC entering the ecosystem. Much of cbBTC's growth appears to be sourced from users migrating away from wBTC, particularly after concerns arose in August 2024 regarding BitGo's affiliation with Justin Sun, which led to Coinbase delisting wBTC and resolving legal challenges. cbBTC's rapid expansion can largely be attributed to Coinbase's ability to onboard BTC holders directly through its established custody and exchange services, resulting in fewer steps and lower friction compared to alternative mints. This efficiency positions cbBTC as the preferred choice for institutions and treasuries already using Coinbase for their transactions. This overview is based on insights from The Block's Data & Insights newsletter, which analyzes the industry's evolving trends. Disclaimer: The Block, an independent media outlet, continues to provide timely news and data. Major investor Foresight Ventures backs The Block and invests in various crypto companies. In collaboration with anchor LP Bitget, The Block maintains its objectivity in reporting. All rights reserved © 2025 The Block. This article is for informational purposes only and not intended as legal or financial advice.