Bitcoin has surged over 5% since Wednesday, but volatility and uncertainty have clouded the past few weeks. However, a significant announcement from Coinbase is bringing fresh optimism for BTC holders eager to explore DeFi opportunities.
Bitcoin (BTC) price showed another leg up on Wednesday, continuing its rally from last week. However, the past few weeks have been filled with volatility and uncertainty. But a new announcement from Coinbase might bring some fresh optimism for BTC holders looking to explore decentralized finance (DeFi) opportunities.
Yesterday, Coinbase announced the launch of Coinbase Wrapped BTC (cbBTC), an ERC20 token that is 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.
This move will allow Bitcoin holders to unlock new ways to engage with DeFi, providing greater flexibility in using their BTC across multiple platforms.
Coinbase's introduction of cbBTC marks another step forward in increasing economic freedom in the crypto space. BTC users will now have more opportunities to leverage their assets while staying connected to DeFi's growing ecosystem.
Bitcoin Is Now Available On Base
Coinbase is essentially linking deep off-chain Bitcoin liquidity to fast, low-cost financial networks on Base and Ethereum.
Through cbBTC, the company is enabling Bitcoin holders to use their assets across more chains, fostering a more interconnected financial ecosystem.
Wrapped assets like cbBTC allow users to utilize Bitcoin in new ways, helping bridge the gap between traditional Bitcoin holding and decentralized finance (DeFi).
CbBTC will also make it easier to move assets quickly and efficiently between Bitcoin and Ethereum, eliminating the friction of transferring assets between chains. This compatibility will enable a wider range of use cases, such as providing Bitcoin as liquidity to DeFi protocols or as collateral for borrowing other crypto assets.
At launch, cbBTC will be available on decentralized exchanges (DEXs) like Aerodrome, Curve, Matcha, and Uniswap, as well as lending platforms Aave, Compound, Morpho, Moonwell, and Spark. It will also be supported by real-world asset (RWA) protocols such as Maple.
When Coinbase users send Bitcoin from their accounts to an address on Base or Ethereum, their BTC will automatically convert 1:1 into cbBTC. Similarly, when users receive cbBTC in their Coinbase accounts, it will convert back into BTC.
It's important to note that cbBTC will not have a separate trading pair or order book on Coinbase. Instead, it will be tradable through DEXs via Coinbase Wallet and other third-party exchanges that choose to support it.
Bitcoin Price Testing Key Resistance
Bitcoin (BTC) trades at $58,302, showing another day of resilience in the green. However, for a sustained upward move, it must break above the 4-hour 200 exponential moving average (EMA) at $58,717—just under 1% from the current level.
This EMA has been a crucial short-term resistance since early August, highlighting its importance in BTC's price action. 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 watch.
Conversely, if Bitcoin struggles to close above $60,000 in the coming days, a consolidation phase or even a deeper correction may be on the horizon. 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 monitor BTC’s ability to overcome this resistance to gain insight into its near-term trajectory.
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