Kraken has recently introduced a new product called kBTC, which is a fully-backed, cross-network-compatible ERC-20 token representing Bitcoin. Each kBTC token is backed 1:1 by an equivalent amount of Bitcoin, securely stored in Kraken’s custody. The token has undergone security audits by Trail of Bits, ensuring its safety and reliability.
The launch of kBTC aligns with Kraken’s mission to promote global crypto adoption by leveraging Bitcoin’s strengths and expanding its use cases into decentralized finance (DeFi) and other blockchain ecosystems. The company’s launch partners for kBTC include deBridge, Definitive, Gauntlet, ParaSwap, and Yearn, showcasing the potential for growth and adoption in the market.
kBTC can be used across various decentralized applications (dApps) due to its compatibility with networks like Ethereum and OP Mainnet. Kraken also has plans to extend its compatibility to other blockchain ecosystems, expanding the reach and utility of kBTC in the crypto market. Currently, the on-chain data shows that the total supply of kBTC is 100 BTC, valued at approximately $6.75 million.
Kraken’s entry into the wrapped Bitcoin space comes at a time of increasing competition, particularly against BitGo’s Wrapped Bitcoin (WBTC), which currently dominates the market with a $10 billion market capitalization. In response to this competition, Coinbase has launched its own wrapped Bitcoin product, cbBTC, on Ethereum and Base, while 21.co, the parent company of 21Shares, introduced its own wrapped Bitcoin product, 21BTC.
The surge in wrapped Bitcoin offerings began after BitGo’s controversial partnership with Hong Kong-based BiT Global, connected to Tron founder Justin Sun, was announced in August. This move raised concerns in the crypto community, leading DeFi protocols like Sky (formerly MakerDAO) and Aave to consider discontinuing support for WBTC on their platforms. As a result, the market for wrapped Bitcoin products has become more competitive, with new offerings and partnerships emerging to challenge the dominance of existing players.
Overall, Kraken’s launch of kBTC represents a significant step in expanding the utility and adoption of Bitcoin in various blockchain ecosystems. With its secure and fully-backed solution, kBTC has the potential to unlock Bitcoin’s unparalleled value and enable new use cases in the DeFi space and beyond. As the competition in the wrapped Bitcoin market intensifies, it will be interesting to see how Kraken’s kBTC stands out and attracts users in the rapidly evolving crypto landscape.
