Circle launches cirBTC on Ethereum to compete in wrapped bitcoin market
In brief
- Circle unveiled cirBTC, a 1:1 bitcoin-backed wrapped token on Ethereum
- cirBTC enables institutions and traders to deploy bitcoin collateral across DeFi protocols
- Market entry challenges wBTC ($7.3B) and Coinbase's cbBTC ($5.4B) in $13B synthetic BTC sector
Wrapped Bitcoin's Growing Market
Wrapped bitcoin tokens exist to solve a structural problem: bitcoin's network doesn't support smart contracts or DeFi protocols. Wrapped bitcoin (wBTC) was introduced in 2019 and remains the largest synthetic bitcoin token with a market cap of around $7.3 billion. Coinbase's cbBTC, which appeared in 2024, sits at just under $5.4 billion.
The market cap of all synthetic bitcoin tokens combined hovers between $12.5 billion and $13.5 billion. That represents about 1% of bitcoin's total value of around $1.25 trillion. Plenty of room to grow.
Circle's Institutional Play
Circle already dominates stablecoins. Its USDC is the second-largest stablecoin on the market with a cap of over $75 billion. Now it's entering the wrapped bitcoin space.
The introduction of cirBTC positions Circle to compete directly with Coinbase and BitGo Holdings for dominance of the institutional synthetic BTC market. Circle's move signals confidence that institutions want easier ways to deploy bitcoin capital into DeFi without custodial friction.
