Bitcoin Backed Token Announced By Coinbase: BTC Holders Can Now Access DeFi Apps on Base
Bitcoin has experienced a notable increase of over 5% since Wednesday, although the past few weeks have been marked by significant volatility and uncertainty. Amidst this, a groundbreaking announcement from Coinbase is infusing fresh optimism among Bitcoin (BTC) holders who are eager to explore decentralized finance (DeFi) opportunities.
Introducing Coinbase Wrapped BTC (cbBTC)
Coinbase has unveiled Coinbase Wrapped BTC (cbBTC), an ERC20 token that is backed 1:1 by Bitcoin (BTC) held by Coinbase. Initially, cbBTC will be available on the Base and Ethereum networks, with plans for further expansion to additional chains in the future.
This strategic move allows Bitcoin holders to unlock new avenues for engaging with DeFi, providing them with greater flexibility to use their BTC across multiple platforms. By introducing cbBTC, Coinbase is taking a significant step towards enhancing economic freedom within the crypto space. BTC users now have more opportunities to leverage their assets while staying connected to DeFi’s rapidly expanding ecosystem.
Bitcoin Is Now Available On Base
Coinbase’s initiative links deep off-chain Bitcoin liquidity to fast, low-cost financial networks on Base and Ethereum. Through cbBTC, Bitcoin holders can utilize their assets across more chains, fostering a more interconnected financial ecosystem. Wrapped assets like cbBTC enable users to use Bitcoin in innovative ways, bridging the gap between traditional Bitcoin holding and decentralized finance.
cbBTC eliminates the friction of moving assets between chains by offering seamless compatibility with DeFi applications. This opens the door to novel use cases such as providing Bitcoin as liquidity to DeFi protocols or using it as collateral for borrowing other crypto assets.
At launch, cbBTC will be available on decentralized exchanges (DEXs) like Aerodrome, Curve, Matcha, and Uniswap, and lending platforms such as Aave, Compound, Morpho, Moonwell, and Spark. Additionally, cbBTC can be utilized in real-world asset (RWA) protocols like Maple.
When Coinbase users send Bitcoin from their accounts to an address on Base or Ethereum, their BTC automatically converts 1:1 into cbBTC. Similarly, when users receive cbBTC in their Coinbase accounts, it will convert back into BTC. It is important to note that cbBTC will not have a separate trading pair or order book on Coinbase but will be tradable through DEXs via Coinbase Wallet and potentially other third-party exchanges that choose to support it.
Bitcoin Price Testing Key Resistance
Bitcoin (BTC) is currently trading at $58,302, inching closer to higher price levels. For a sustained upward movement, it must break above the 4-hour 200 exponential moving average (EMA) at $58,717—a mere 1% away from the current level.
This EMA has been a crucial short-term resistance since early August, highlighting its significance. A successful breach and hold above this EMA could signal a trend change and potentially lead BTC to test the next significant supply level of around $61,500. This level will be a key resistance point to monitor.
Conversely, if Bitcoin struggles to close above $60,000 in the coming days, a consolidation phase or even a deeper correction may be anticipated. This scenario would suggest that the current resistance is holding firm, and BTC might face further challenges in its attempt to push higher. Traders and investors should closely monitor BTC’s ability to overcome this resistance to gain insights into its near-term trajectory.
