Coinbase Suspends Wrapped Bitcoin (WBTC) Trading Amid cbBTC Boom

The decision, revealed in a post on X (formerly Twitter), cites a routine review of its listed assets to ensure compliance with listing standards.

Crypto exchange Coinbase will suspend trading for wrapped Bitcoin (WBTC) on December 19, a move that comes as its own wrapped BTC token, cbBTC, sees growing adoption.

Coinbase announced the decision in a post on X (formerly Twitter) on Monday, stating that the decision follows a routine review of its listed assets to ensure compliance with listing standards.

“Coinbase will suspend trading for WBTC (WBTC) on December 19, at or around 12 pm ET. Your WBTC funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time. We have moved our WBTC order books to limit-only mode. Limit orders can be placed and canceled, and matches may occur.”

The suspension will apply to both Coinbase Exchange and Coinbase Prime, the exchange’s platform for institutional clients. However, WBTC holders will retain full access to their funds and the ability to withdraw them at any time.

In preparation for the transition, Coinbase has moved WBTC trading to a limit-only mode, where users can place and cancel limit orders while matches may still occur.

Coinbase Sidesteps WBTC Amid cbBTC Boom

Coinbase’s decision to phase out WBTC trading comes amidst the rapid success of cbBTC, a wrapped Bitcoin token pegged to Bitcoin on a 1:1 basis and backed by Coinbase.

Recently, cbBTC surpassed the $1 billion mark in market capitalization, reflecting growing adoption and trust within the crypto community. This milestone has further cemented cbBTC’s position as a strong competitor to WBTC in the decentralized finance (DeFi) space.

As of press time, data on Dune shows that cbBTC market capitalization has increased to $1.44 billion. CBTC’s native availability on networks like Solana, Ethereum, and Base has significantly expanded its accessibility, with Arbitrum being the latest addition.

“cbBTC is live on Arbitrum. cbBTC is an ERC-20 token that is backed 1:1 by Bitcoin (BTC) held by Coinbase. It is natively available on Arbitrum and securely accessible to more users across the Ethereum ecosystem,” Coinbase shared on Tuesday.

Moreover, prominent DeFi protocol Aave is targeting cbBTC for its Version 3 (V3) platform, enhancing its utility within the ecosystem. This growing momentum may have played a key role in Coinbase’s decision to phase out WBTC trading.

WBTC Core Team Urge Coinbase to Reconsider

The team behind Wrapped Bitcoin expressed regret and surprise at Coinbase’s decision in a statement on X.

“We regret and are surprised by Coinbase’s decision to delist WBTC…We urge Coinbase to reconsider this decision and continue supporting WBTC trading.”

The statement outlined WBTC’s longstanding reputation for novel mechanisms, regulatory compliance, and decentralized governance. Highlighting its seamless integration with DeFi protocols, WBTC described itself as an essential liquidity solution for Bitcoin users.

Urging Coinbase to reconsider, WBTC stated that it is ready to address any concerns or provide additional information to support its case.

“Coinbase’s decision to fully delist WBTC has left many in the community scratching their heads. As the team behind WBTC, we are surprised and disappointed by this move, especially given our commitment to compliance, transparency, and decentralization.”

The team pointed out that WBTC has been a pioneer in the wrapped token space for almost four years, facilitating Bitcoin’s integration into DeFi and enabling novel use cases. They emphasized WBTC’s role in facilitating decentralized governance and multi-signature custody, which have been crucial to Bitcoin’s integration into the broader crypto ecosystem.

“We believe that WBTC’s fully decentralized governance and multi-signature custody model, which have been essential to Bitcoin’s success, should be valued and supported by any exchange that truly cares about the future of Bitcoin and the community.”

The statement concluded by highlighting WBTC’s importance as a liquidity solution for Bitcoin users and its seamless integration with DeFi protocols. The team expressed gratitude for the community’s support and stated that it will continue working to advance Bitcoin’s utility.

“As the O.G. wrapped token, WBTC has been critical to expanding Bitcoin’s liquidity and utility. We are grateful for the community’s support over the years and will continue working to advance Bitcoin’s role in DeFi.”

Mixed Reactions Trail Coinbase’s Move

Coinbase’s announcement has sparked mixed reactions across the crypto community. Some users criticized the exchange, suggesting the decision reflects an inability to handle competition.

“Coinbase can’t handle fair competition?? WBTC superior to cbBTC,” said Gally Sama in a post.

Others support the move, citing concerns over WBTC’s custody model, with one user referencing BitGo’s recent adoption of a multi-jurisdictional custody system.

“You put custody in the hands of a fraud. What did you think was gonna happen?”