cbBTC, Coinbase's wrapped-Bitcoin product, surpassed WBTC in total circulating supply this week. The crossover marks the end of WBTC's seven-year tenure as the dominant wrapped-Bitcoin asset on Ethereum and other EVM chains, and it caps a restructuring of the wrapped-Bitcoin market that has been unfolding since BitGo's controversial custody-arrangement changes in late 2024.
The distribution today: cbBTC at roughly $9.4 billion in circulating supply, WBTC at roughly $8.7 billion, tBTC at roughly $1.6 billion, and a long tail of smaller wrapped-Bitcoin products totaling approximately $900 million.
The Custody-Trust Dimension
Wrapped-Bitcoin products are functionally identical at the user level — each represents a one-to-one claim on real Bitcoin held in custody — but they differ on the custody side, and the custody side is what drives institutional and protocol preference.
WBTC's dominant position eroded after BitGo's October 2024 announcement that it would move WBTC custody to a multi-jurisdictional arrangement involving partners outside BitGo's existing structure. The change was operationally minor but symbolically large. DeFi protocols that had built positions around WBTC began the process of evaluating alternatives and, in many cases, transitioning their collateral acceptance lists.
cbBTC, launched by Coinbase in September 2024 in advance of the WBTC restructuring, was positioned exactly to capture that transition flow. The custody arrangement is straightforward: Coinbase holds the underlying Bitcoin in its custody infrastructure, with attestations published on a regular cadence. For protocols and institutions that already had Coinbase counterparty relationships — which is most of them — the custody side was a known quantity.
The migration accelerated through 2025 and into 2026. Aave added cbBTC to its main markets in November 2024. Maker (now Sky) followed in January 2025. By mid-2025, cbBTC was supported on roughly 80% of the EVM-chain DeFi protocols where WBTC had previously been dominant. The flow followed the support.
The Other Wrapped-Bitcoin Variants
The wrapped-Bitcoin market is more fragmented than the cbBTC-vs-WBTC framing suggests, and the smaller variants are growing meaningfully.
tBTC (Threshold Network's decentralized wrapped Bitcoin) has more than tripled in supply over the past 18 months. Its design — using a threshold-signature scheme rather than a custodian — appeals to a specific cohort of DeFi users who prioritize trust-minimization. The growth has been concentrated in protocols where decentralization positioning matters: certain Maker vaults, specific Curve pools, and a handful of newer DeFi-credit protocols.
FBTC (Floki's wrapped product, despite the name not actually a Floki/memecoin product) has emerged as a meaningful alternative on Ethereum L2s, with custody handled by a Hong Kong-licensed entity. Its distribution is heavily concentrated in Asia-pacific DeFi flows.
LBTC (Lombard's wrapped Bitcoin) is the newest entrant of meaningful scale. Its design integrates Babylon's Bitcoin staking primitive — meaning holders of LBTC are simultaneously earning Bitcoin-staking yield via Babylon. That combination has attracted yield-focused capital and pushed LBTC supply into the high hundreds of millions in less than a year.
What This Means for DeFi BTC Liquidity
The fragmentation has implications for DeFi protocols that depend on wrapped-Bitcoin liquidity. A unified WBTC market was easier to build pools and lending markets around — concentration produced depth, depth produced lower slippage, lower slippage produced more usage.
The current four-way split (cbBTC, WBTC, tBTC, smaller variants) requires protocols to either support multiple variants — which fragments their own liquidity — or to choose one and forgo flow from holders of the others. The largest protocols have generally chosen to support multiple, creating a layer of cross-wrapped-asset routing that has its own inefficiencies.
Curve has emerged as the practical settlement layer for cross-wrapped-Bitcoin liquidity, with deep pools between cbBTC, WBTC, and tBTC that allow holders of one variant to swap into another with minimal slippage. The pools' growth is itself a measurement of the wrapped-Bitcoin fragmentation problem — they exist precisely because the underlying market is no longer unified.
What's Worth Watching Going Forward
The wrapped-Bitcoin market structure is unlikely to consolidate back to single-variant dominance. The custody-trust dimensions, the geographic regulatory differentiation, and the new utility variants like LBTC each have legitimate constituencies that won't migrate to a unified product without specific reason.
The more interesting question is whether one of the new variants — particularly LBTC, with its Babylon-yield integration — manages to scale into a dominant position over the next 18 months. Bitcoin holders who can earn yield by holding their wrapped-Bitcoin variant, rather than the same exposure with no yield, have an obvious incentive to migrate.
Whether Babylon-style yield integration becomes the standard wrapped-Bitcoin design, or whether it stays a niche feature for the most yield-focused holders, will shape the next round of the wrapped-Bitcoin market structure. For now, cbBTC's emergence as the largest single variant is the cleanest signal that the trust-and-custody story is what drives wrapped-Bitcoin market share — and that story is still evolving.
