As is already well known, the Bitcoin protocol is suited for one simple thing, that are transactions and moving coins around. It has a maximum cap of 21M coins, and a system that involves miners writing transactions, nodes reading data, developers and users submitting transaction requests to miners. The system design has successfully endured the test of time and has been very successful till now.
What Bitcoin doesn’t have, and that is by design, are smart contracts and all the other things coming with it, enabling DeFi, tokens, NFTs, etc.
With the rise of the smart contract chains like Ethereum, Solana etc. and the introduction of DeFi a demand for a Bitcoin token representation on these chains has emerged. This demand comes from the need for simple trading Bitcoin on chain, to the more complicated stuff like lending using BTC as collateral and more.
In the last period we are seeing a new trend introducing Bitcoin yielding tokens, where the wrapped version of Bitcoin is a yield bearing token similar like the staked ETH tokens, stETH or Solana JitoSOL.
The most important thing to have in mind about these Bitcoin derivatives is that they are not actual Bitcoin. A token on the Ethereum network or any other network is not Bitcoin. It is a representation of Bitcoin with a promise to keep a 1:1 value. Usually, the way this works is some entity is establishing a vault on the Bitcoin chain where they keep the native Bitcoin and for every Bitcoin put in that vault/s they mint the wrapper on the other chain. It’s basically a service provided by a third party and it has an inherent additional risk from the third party.
With this said lets take a look at the tokens list. Here it is:
- WBTC
- BTCB
- cbBTC
- LBTC
- SolvBTC
- eBTC
- tBTC
There are more but these are the biggest one and represent most of the industry.
WBTC
WBTC is a wrapped Bitcoin on the Ethereum and other EVM compatible networks. How does this work? Well, there is a centralized entity, a company that users send Bitcoin to, they lock it into a wallet and mint WBTC on the Ethereum network. Because crypto is transparent, users can see both of the wallets for the native BTC on the Bitcoin network and WBTC on the Ethereum network at any time and make sure the balances match.
WBTC allows users to use Bitcoin in defi protocols like AAVE and MakerDAO. In most cases WBTC is provided as collateral and then users borrow against it. It’s a beautiful thing as long as you manage your position and don’t overleverage and get liquidated. BitGo announced a joint venture with BiT Global in August 2024, expanding WBTC custody beyond the US. The partnership involved Justin Sun and the Tron ecosystem. This caused controversy, and soon after Coinbase launched their Bitcoin wrapper cbBTC.
Here is the chart for WBTC.
Note that these charts use BTC equivalents, calculated by dividing each token’s market cap by Bitcoin’s USD price.
As we can see there has been a high growth in the amount of WBTC in the previous bull run. Starting from 2020, till 2022, the amount of BTC represented by WBTC kept growing and reached an ATH of 288k in May 2022. At the time at those prices the market cap was around 10B. Towards the end of 2022 the amount of WBTC dropped to around 150k and stayed around those levels through 2023. Then in 2024 there was a further drop in the amount of BTC represented by WBTC. It is now around 116k BTC equivalents, broadly unchanged from June. This might be related to the rebranding and the new emerging competition for wrapped Bitcoin.
Coinbase cbBTC
Following the offshore move from BitGo and the partnership with BitGlobal, Coinbase took a step forward and announced their version of wrapped Bitcoin, cbBTC, starting from September 2024. In this case the custodian for the Bitcoins is Coinbase. They are acting as a bridge between Bitcoin and the other smart contracts chains. A totally centralized solution. Here is the chart for cbBTC:
We can see that starting from September 2024 the amount of cbBTC has grown substantially, with some pullbacks along the way. By 31 October 2026 it represents around 97k BTC equivalents, or around 7.5 billion USD. It has narrowed the gap with WBTC since June, although it is below its September peak of around 100k.
Binance BTCB
Binance has launched their version of the wrapped Bitcoin on the BSC network to be used in apps like Pancake and other DeFi applications. It remains around the 65k BTC-equivalent mark at the end of October, broadly unchanged from June.
Lombard LBTC
Another version of the Bitcoin wrappers, but this time with a twist. It provides yield.
Lombard LBTC is a yield-bearing Bitcoin token that can be used in decentralized finance (DeFi) applications. In 2026, Lombard moved its yield source from Babylon staking to a covered-call options strategy managed by Bitwise Investment Manager, LLC. Yield accrues through the LBTC/BTC exchange rate, so one LBTC can represent more than one Bitcoin.
The yield is variable and is not guaranteed. Strategy losses and custody risks can reduce the Bitcoin value represented by each LBTC.
Here is the chart for LBTC.
As we can see this chart had an uptrend up until April 2025 reaching around 21k BTC equivalents. A drop since then and it is now at around 6.6k, down from 10.7k in June. Its market cap is around 513 million USD at the latest Bitcoin price.
Cumulative Chart for the Top Bitcoin Wrappers
When we add these wrappers together, including SolvBTC, BTC.b, eBTC and tBTC, we get this chart.
This is a long term chart, starting from 2020, when the only dominant player was WBTC. But we can see that since 2024 the competition has heated up significantly and more options for Bitcoin wrappers have emerged. In the last period the amount of BTC represented by WBTC has been broadly stable, while cbBTC has grown and BTCB has been somewhat stagnant. Overall the total remains below its peak of around 312k BTC equivalents in February 2026. We are now at a cumulative 298k BTC equivalents across the eight wrappers.
When we zoom in, we get this:
Here we can see more clearly how the WBTC dominance is going down and more other options have emerged.
cbBTC is the leader of those alternatives and has narrowed the gap with WBTC to around 19k BTC equivalents. When we combine this with the other Bitcoin held on Coinbase, it is becoming quite staggering how much Bitcoin Coinbase holds for its users.
Top Bitcoin Wrappers Share
The current share among the six Bitcoin wrappers shown in this chart looks like this.
WBTC is still dominant with around 39%, but far from the only dominant player where it was just two years ago. Coinbase cbBTC has around 33% share, followed by Binance BTCB with 22%, then LBTC, SolvBTC and tBTC. BTC.b and eBTC are included in the cumulative totals but not in this share chart.
At the end the market cap for the bitcoin wrappers in USD:
When we look in USD dollars, the combined market cap reached an ATH of around 36.4B on 7 October 2025. Since then the price of Bitcoin dropped and we are now around 23B, but still it is amazing how much value is held in these wrapped versions of BTC. It is obvious that there is demand for these types of BTC and their use in DeFi, mostly as collateral to borrow against.
Overall, we can see that there are now more options for Bitcoin wrappers. Coinbase has continued gaining ground, while WBTC and BTCB have stayed broadly stable since June. LBTC and the smaller wrappers have declined in BTC-equivalent value. The need for Bitcoin DeFi is obvious and users are searching for yield. This of course comes at additional risk, and everyone should be very cautious when using these products. For sure do not put all your BTC in any of them. My guess is that as time goes on, we will see more and more BTC derivatives that will try to add more functionality and financial instruments to Bitcoin.
All the best @dalz
