Bitcoin has surged more than 5% since Wednesday, but the past few weeks have been clouded by volatility and uncertainty. But a major announcement from Coinbase is bringing renewed optimism to BTC holders interested in exploring DeFi opportunities.
Yesterday, Coinbase released Coinbase Wrapped BTC (cbBTC), an ERC20 token backed 1:1 by Bitcoin (BTC) held by Coinbase. Initially, cbBTC will be supported on Base and Ethereum, with plans to expand to more chains in the future.
The move gives Bitcoin holders a new way to engage with decentralized finance (DeFi) and gives them more flexibility in using BTC across multiple platforms.
Coinbase's introduction of cbBTC marks another step towards greater financial freedom in the cryptocurrency space, giving BTC users more opportunities to leverage their assets while staying connected to the growing DeFi ecosystem.
Bitcoin now accepted at base
Coinbase is taking a groundbreaking step by linking deep off-chain Bitcoin liquidity to a fast, low-cost financial network on Base and Ethereum.
Through cbBTC, the company is enabling bitcoin holders to utilize their assets across more chains, fostering a more interconnected financial ecosystem. Wrapped assets like cbBTC allow users to utilize their bitcoin in new ways, helping to bridge the gap between traditional bitcoin holdings and decentralized finance (DeFi).
cbBTC removes the friction of moving assets between chains by providing seamless compatibility with DeFi applications, opening the door to new use cases such as providing Bitcoin as liquidity to DeFi protocols or as collateral to borrow other crypto assets.
At launch, cbBTC will be available on decentralized exchanges (DEXs) such as Aerodrome, Curve, Matcha, and Uniswap, as well as lending platforms such as Aave, Compound, Morpho, Moonwell, Spark, etc. Additionally, cbBTC can also be used on real-world asset (RWA) protocols such as Maple.
When a Coinbase user sends Bitcoin from their account to a Base or Ethereum address, the BTC is automatically converted 1:1 to cbBTC. Similarly, when a user receives cbBTC in their Coinbase account, it is converted back to BTC.
Importantly, cbBTC will not have a separate trading pair or order book on Coinbase, but will be tradeable through the DEX via the Coinbase Wallet, and potentially on other third-party exchanges that choose to support it.
Bitcoin Price Tests Key Resistance
Bitcoin (BTC) is trading at $58,302, nearing a new high, but for the upside to sustain, it needs to climb above the 4-hourly 200 exponential moving average (EMA), which is at $58,717, just under 1% from the current level.
This EMA has been a key short-term resistance since early August, highlighting its importance. A breakout and above this EMA would signal a change in trend and could see BTC test the next key supply level around $61,500. This level will be a key resistance point to watch.
Conversely, if Bitcoin struggles to close above $60,000 in the coming days, a consolidation phase or even a deeper correction could be on the way. This scenario suggests that current resistance is solid and BTC may face further difficulties in attempting to move higher. Traders and investors should monitor BTC's ability to overcome this resistance to get a sense of its short-term trajectory.
Featured image from Dall-E, chart from TradingView
