- Coinbase is set to cease support for WBTC.
- The move appears to be the latest salvo in the ongoing tokenized Bitcoin power struggle.
- Still, Coinbase’s move may have little impact on WBTC.
Over the past three months, WBTC, one of the oldest and most trusted Bitcoin wrappers leveraged by traders to engage in DeFi activities on chains with smart contract capabilities, has come under intense scrutiny. The scrutiny follows the decision of WBTC’s custodian, BitGo, to hand over custody of the token to a joint venture with BiTGlobal, a firm with links to the controversial Tron founder, Justin Sun.
Amid the uproar, a window has opened for competing products to grab some of the tokenized BTC market share. One firm, in particular, looking to cash in on the opportunity is Coinbase, the largest US crypto exchange by volume. After launching its WBTC alternative, cbBTC, in September 2024, the firm has announced plans to cease support for the former on its exchange.
Coinbase Doubling Down on Play for Tokenized Bitcoin Market Share?
Coinbase is set to cease support for WBTC. On Tuesday, November 19, the crypto exchange disclosed that it would stop trading for WBTC on December 19, asserting that the asset had failed to meet its listing standards in a recent review. Beyond this deadline, the exchange noted that users can only withdraw their WBTC holdings.
Sponsored
For many, however, Coinbase’s move to delist WBTC is the latest salvo in the tokenized Bitcoin market power struggle as the exchange champions cbBTC, its wrapped Bitcoin variant.
โpushing out the competition in favor of cbBTC it seems,โ Bonzo Finance Labs CEO Brady Gentile wrote, surmising the prevalent sentiment around the news.
These views come as, despite Coinbase’s assertions and some of the initial uproar that followed Justin Sun’s WBTC links, not much appears to have changed about the asset, at least for now.
Overblown Concerns?
The skepticism that follows Justin Sun’s WBTC links comes as several entities and projects linked to the Tron founder have faced transparency and stability concerns over the past year, with many fingers pointing to him as the cause. These entities and assets include HTX (formerly Huobi) and TrueUSD (TUSD). Many believe Sun channels the funds under his management to personal ventures while compromising transparency measures to cover his tracks.
Dispelling concerns that WBTC will suffer such a fate, BitGo CEO Mike Belshe has clarified that neither BiTGlobal nor Sun would be able to unilaterally change the asset’s management.
โThey will be able to change the practices for the single key held with BitGlobal; although they have committed to use BitGo software/hardware. You can ask them this question too. They will not 'have the ability to direct changes to key management practices' at BitGo or BitGo Singapore. They will not 'have the ability to change control of key materials' at BitGo or BitGo Singapore,โ Belshe wrote in September 2024, trying to dissuade Sky (formerly MakerDAO) from offboarding WBTC.
According to Belshe, any changes to the current WBTC management arrangement will follow a 60-day notice as has been BitGo’s practice, giving holders ample time to make adjustments.
In line with Belshe’s arguments, the WBTC core team expressed surprise at Coinbase’s recent decision.
โWe regret and are surprised by Coinbaseโs decision to delist WBTC. As the core team behind Wrapped BTC, we have always been committed to providing the community with the most compliant, transparent, and decentralized BTC tokenization product,โ they wrote.
โWe urge Coinbase to reconsider this decision and continue supporting WBTC trading. If you have any questions or suggestions, please feel free to reach out to us. We are more than willing to provide additional information to address any concerns.โ
Despite the WBTC core team’s pleas, it is unclear whether Coinbase’s delisting will significantly impact the asset. According to CoinMarketCap data at the time of writing, Coinbase accounts for only about $10 million of WBTC’s over $520 million 24-hour volume.
On the Flipside
- While Coinbase has unveiled WBTC delisting plans, it appears to be on a memecoin listing spree in recent weeks.
- Coinbase’s delisting may have little impact on WBTC.
Why This Matters
Coinbase is the largest cryptocurrency exchange by volume in the US, which is generally regarded as the world’s largest market in terms of capital.
Read this for more on Coinbase’s tokenized BTC play:
How Coinbaseโs cbBTC Aims to Cash in on WBTC Uproar
Learn more about the implications of the recent Lido DAO ruling:
Lido DAO Not Immune to Legal Liability, Court Rules: What Now?
