Circle launches cirBTC and enters institutional wrapped Bitcoin market

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Circle launches cirBTC

Highlights

Circle is launching cirBTC, a wrapped Bitcoin token backed 1:1 with BTC.
The asset is aimed at OTC desks, market makers, and lending protocols, not the mass market.
Circle main rivals in this segment are BitGo WBTC and Coinbase cbBTC, with market capitalizations of around $8 billion and $5.9 billion respectively.

According to Cointelegraph, the new asset will be issued on Ethereum and backed by Bitcoin at a 1:1 ratio. Circle said cirBTC is being built as a “highly secure and neutral version of wrapped BTC” and is designed for OTC venues, market makers, and lending protocols. In addition to Ethereum, the token is also planned for Arc, Circle own blockchain, as well as Circle Mint infrastructure.

A new player in the wrapped Bitcoin market

The point of wrapped Bitcoin is that it allows BTC to be used in ecosystems like Ethereum, where Bitcoin in its native form is unavailable for most DeFi use cases. For large participants, this is a way to keep exposure to Bitcoin price moves while also gaining access to lending, trading, and other onchain tools. That is why Circle is targeting institutional demand rather than the mass retail segment.

The launch of cirBTC looks like a logical continuation of Circle broader strategy. The company has already been building infrastructure around USDC, Circle Mint, and Arc, which it describes as a Layer 1 built specifically for stablecoin finance. Now that lineup is being expanded with a wrapped Bitcoin product capable of linking institutional demand for BTC with the DeFi ecosystem.

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Competition with BitGo and Coinbase

Circle is entering a market where the leaders are already well established. Coinbase cbBTC has a market capitalization of about $5.9 billion with a supply of 88,800 tokens. BitGo WBTC remains the largest wrapped Bitcoin asset, with a market cap of about $7.9 billion to $8 billion and roughly 120,000 tokens in circulation. The combined supply of WBTC and cbBTC is close to 208,000 BTC.

At the same time, the market is no longer limited to just two players: Kraken, Binance, Gate, Huobi, and OKX have all launched their own wrapped Bitcoin products. But their scale still trails well behind WBTC and cbBTC, so Circle will have to compete primarily with those two projects for liquidity, the trust of custodial partners, and DeFi integrations.

What changes for the market

Large financial players have become major buyers of BTC in recent years, but at the same time they are looking for ways to use the asset in DeFi without moving into less familiar infrastructure. cirBTC could become another bridge for them between Bitcoin custody and onchain liquidity on Ethereum and Arc.

For the market itself, this is a sign that the battle is no longer only about issuing stablecoins, but also about controlling the core infrastructure of tokenized Bitcoin. If Circle manages to capture even part of a market where the two leaders account for about 208,000 BTC in supply, competition in this segment will intensify significantly.

Earlier, we reported that wallet in Telegram introduces perpetual futures trading with Lighter integration.

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