Coinbase, the largest Cryptocurrency exchange in the United States, has announced that it will stop trading Wrapped Bitcoin (WBTC) on December 19, 2024, at approximately 12:00 noon (ET).
The decision, revealed in a post on X (formerly Twitter), is based on periodic audits of listed assets to ensure compliance with listing standards.
Coinbase Avoids WBTC Amid cbBTC Boom
The suspension will apply to both Coinbase Exchange and Coinbase Prime. Although trading will cease, WBTC holders will still have full access to assets and the ability to withdraw funds at any time. To prepare for the transition, Coinbase moved WBTC trading to limit-only mode, where users can place and cancel limit orders while execution is still possible.
“Coinbase will stop trading WBTC (WBTC) on December 19, 2024, at or around 12pm ET. Your WBTC funds will still be available to you, and you will still have the ability to withdraw your funds at any time. We have moved the WBTC order book to limited-only mode. Limit orders can be placed and canceled, and execution can occur,” Coinbase detail.
Coinbase’s move to stop trading WBTC comes amid the rapid success of its bundled Bitcoin token, cbBTC. Recently, cbBTC surpassed the $1 billion market capitalization, reflecting growing acceptance and trust within the Cryptocurrency community. This milestone further solidifies cbBTC’s position as a strong competitor to WBTC in the DeFi (DeFi) space.
As of this moment, data on Dune shows that cbBTC market capitalization has increased to $1.44 billion. The native availability of cbBTC on networks such as Solana, Ethereum, and Base has significantly expanded its reach, with Arbitrum being the latest network to be added.
“cbBTC is now available on Arbitrum. cbBTC is an ERC-20 Token backed 1:1 by Bitcoin (BTC) held by Coinbase. It is natively available on Arbitrum and is secure to reach more users in the Ethereum ecosystem,” Coinbase share on Tuesday.
Additionally, prominent DeFi protocol Aave is targeting cbBTC for its Version 3 (V3) platform, enhancing its utility in the ecosystem. This growing momentum may have played a key role in Coinbase’s decision to remove WBTC trading.
WBTC Core Team Calls for Coinbase to Reconsider
The team behind Wrapped Bitcoin expressed regret and surprise at Coinbase’s decision. In a statement on X, WBTC’s core team emphasized their commitment to compliance, transparency, and decentralization.
“We regret and are surprised by Coinbase’s decision to remove WBTC… We urge Coinbase to reconsider this decision and continue to support WBTC trading,” the team said. speak.
The statement outlined WBTC’s longstanding reputation for innovative mechanisms, regulatory compliance, and decentralized governance. Emphasizing seamless integration with DeFi protocols, WBTC describes itself as an essential liquidity solution for Bitcoin users. Calling on Coinbase to reconsider, WBTC reaffirmed its willingness to address any concerns or provide additional information to support its case.
Meanwhile, Coinbase’s announcement has caused mixed reactions in the Cryptocurrency community. Some users criticized the exchange, saying the decision reflected an inability to deal with competition.
“Coinbase can’t deal with fair competition?? WBTC outperforms cbBTC” speak Gally Sama in a post.
However, others supported the move, citing concerns about WBTC’s custodian model, with one user referencing BitGo’s recent adoption of a multi-region custodian system.
“You have placed guardianship in the hands of a fraudster. What do you think will happen?” user expressed.
These criticisms are in line with growing concerns about Justin Sun’s involvement in WBTC custody, as TinTucBitcoin recently reported. Some users have taken precautionary action to avoid potential risks, with one commenter sharing their concerns.
“When Sun joined the multisig for WBTC, I sent all my WBTC on OP to Coinbase and exchanged it for real BTC which I withdrew to my hardware wallet… You just confirmed that I made the right move, ” Surname write.
The decision to suspend WBTC trading could mark a pivotal moment in the competition between bundled Bitcoin solutions. While the integration of cbBTC across multiple blockchain networks has gained momentum, skepticism around WBTC’s custodian and leadership model has increased.
Justin Sun has criticized Coinbase’s cbBTC strategy, calling it an obstacle to widespread Bitcoin adoption. As the debate continues, the industry is keenly watching to see whether Coinbase’s cbBTC can consolidate its dominance or whether WBTC can regain its position as a leading bundled Bitcoin solution. Regardless, the change in dynamics reflects the importance of transparency, governance, and community trust in shaping the future of DeFi.
