Key Takeaways:

• Wrapped Bitcoin (e.g., WBTC and cbBTC) extends Bitcoin's utility beyond its native network, enhancing cross-chain accessibility and interoperability.

• Different wrapped Bitcoin variants employ distinct custody models and governance structures—ranging from fully centralized issuers (e.g., Coinbase’s cbBTC) to decentralized, smart contract-based systems (e.g., Threshold’s tBTC).

• WBTC has the largest supply (~129K BTC), but cbBTC is rapidly gaining share (~43K BTC on Base and Solana). Combined, they represent over 172K wrapped BTC, utilized differently across blockchains.

• Wrapped Bitcoin is widely adopted in DeFi: WBTC dominates Ethereum DEXs (led by Uniswap v3), while cbBTC sees more activity on platforms like Aerodrome. Over $7B in WBTC and cbBTC is locked in lending protocols (e.g., Aave, Morpho) for borrowing/lending.

Bitcoin’s scarcity and predictable monetary policy make it an ideal "store of value," with ownership increasingly concentrated among long-term holders, ETFs, and corporations. But as BTC is "hoarded," its $2T native token remains underutilized—what does this imply?

To address this, a growing ecosystem of products aims to put Bitcoin to work: from BTC-backed lending (e.g., Coinbase’s partnership with Morpho, Cantor Fitzgerald’s credit facilities via Maple Finance) to Bitcoin L2s, cross-chain wrapped assets, and treasury tools like Strategy.

This article explores the evolving landscape of tokenized Bitcoin, focusing on WBTC and cbBTC, and how they expand BTC’s utility across chains.

Demand for using Bitcoin on smart contract platforms has spawned tokenized variants, the largest category being wrapped Bitcoin—BTC-pegged tokens issued on other blockchains, backed 1:1 by custodial BTC via mint/burn mechanisms.

Wrapped Bitcoin enhances accessibility and interoperability, offering programmability and low-cost execution unavailable to native BTC. Below is a comparison of major variants:

While all aim to extend Bitcoin’s utility, their trust assumptions vary: from fully custodial (cbBTC) to DAO-managed (WBTC) to trustless (tBTC). Users relinquish custody to third parties in exchange for tokenized representations.

Beyond these, liquid staking Bitcoin derivatives like Lombard’s LBTC (secured via Babylon Protocol) are emerging, allowing BTC holders to earn staking yields on PoS chains.

Since January 2023, the market cap of wrapped Bitcoin has grown 5x, driven by BTC’s price surge and new cross-chain offerings. The two largest tokens—WBTC (BitDAO) and cbBTC (Coinbase)—collectively represent 172K BTC (~$12B).

• WBTC (launched in 2019) once dominated but has seen slowing demand since BitDAO assumed control in September 2024.

• cbBTC, launched on Base, Ethereum, and Solana, has rapidly gained traction, offsetting WBTC’s decline.

As of June 1, 2025:

• WBTC: 128.8K BTC (81% market share).

• cbBTC: 43K BTC (19%), distributed across Ethereum (27.6K), Base (13.2K), and Solana (23K).

Active addresses and transfer volumes reveal how tokenized BTC is used across ecosystems:

• Base’s cbBTC leads with ~7K daily active addresses (low fees, Coinbase integration).

• Solana follows with growing activity since April (low-cost, high-throughput).

• Ethereum sees fewer but larger transactions, indicating lower retail engagement.

• Base’s cbBTC dominates with ~$40B weekly transfers (excluding April’s exploit-related outliers).

• Ethereum’s WBTC trails at ~$1B weekly.

Wrapped Bitcoin circulates faster than native BTC, underscoring its role in DeFi:

• Base cbBTC > Solana cbBTC > Ethereum cbBTC > WBTC.

WBTC and cbBTC unlock Bitcoin’s use in trading, lending, and liquidity provision without selling holdings.

• Ethereum: WBTC dominates (Uniswap v3). cbBTC volume is minimal.

• Base: cbBTC leads, with Aerodrome peaking at $2.5B daily volume in early 2025.

Over $7B in WBTC/cbBTC is locked in protocols like Aave, Morpho, and Spark:

• WBTC: $5B (mostly Ethereum).

• cbBTC: $2B (Base/Ethereum).

However, custodial risks persist. Users must weigh convenience against centralization.

While Bitcoin’s "store of value" narrative remains entrenched, WBTC and cbBTC are expanding its utility:

• Enabling cross-chain mobility.

• Powering DeFi applications.

• Bridging Bitcoin’s monetary reserve status with programmable economies.

As rollups and sidechains evolve, tokenized Bitcoin will likely remain a critical bridge—balancing trust assumptions with the demand for liquidity and innovation.

Data adjustments: Excluded outlier transactions (e.g., Impermax exploit on Base) to reflect organic activity.