What happened
Circle unveiled cirBTC on Ethereum on Tuesday, per CoinDesk, with the token backed 1:1 by bitcoin held in regulated custody. The product is pitched at traders and protocols that want bitcoin exposure inside Ethereum DeFi without giving up custody to a synthetic or bridged version. Circle's positioning leans on the same reserve-and-attestation framework it built for USDC, the second-largest stablecoin with roughly $40B in circulation.
The CoinDesk report frames cirBTC as a direct shot at Coinbase's cbBTC, which has captured the bulk of wrapped BTC growth on Ethereum and Base since its September 2024 debut. BitGo's WBTC, the original wrapped bitcoin product launched in 2019, remains the legacy benchmark.
Why it matters
Wrapped bitcoin is the plumbing that lets BTC act as collateral on Ethereum. It backs loans on Aave, sits in Curve and Uniswap pools, and underwrites leverage on perp DEXs. Whoever controls the dominant wrapper controls a meaningful slice of DeFi's collateral base.
WBTC's market share cratered in 2024 after BitGo's custody restructuring spooked Maker and other large integrators. Coinbase moved into that vacuum with cbBTC and took share fast. Circle entering now signals two things.
First, the wrapped BTC market is big enough and profitable enough to attract a third heavyweight. Second, Circle is no longer content to be the USDC company. It's building a multi-asset reserve issuer playbook, and bitcoin is the obvious second leg.