Kraken Debuts kBTC Amid Intensifying Wrapped Bitcoin Competition
By: Eva Baxter
In a strategic move to capture the burgeoning market for wrapped Bitcoin products, Kraken has launched its new offering, kBTC, an ERC-20 token fully backed by Bitcoin. Each unit of kBTC corresponds to one Bitcoin held securely within Kraken’s custody, a custody system whose reserves are publicly verifiable through on-chain data. The introduction of kBTC ties into Kraken’s overarching mission to advance global cryptocurrency adoption by broadening Bitcoin’s functionalities across decentralized finance (DeFi) and other blockchain ecosystems.
The announcement of kBTC was made in October, with the product having undergone comprehensive security audits performed by Trail of Bits, an industry-acclaimed security firm. Kraken has partnered with significant blockchain entities such as deBridge, Definitive, Gauntlet, ParaSwap, and Yearn to support the kBTC network. At present, 100 kBTC, representing $6.75 million in value, are in circulation, predominantly on the Ethereum network with a presence also on the OP Mainnet.
This unveiling marks a pivotal moment in the wrapped Bitcoin sector, which has witnessed a sharpened competitive environment. Notably, Kraken’s new product stands poised to compete directly with BitGo’s Wrapped Bitcoin (WBTC), which maintains a 90% market share with a capitalization of $10 billion. This heightened competition also features recent entrants like Coinbase's cbBTC and 21.co's 21BTC. Meanwhile, the market dynamics have been further stirred by BitGo’s partnership with BiT Global, a Hong Kong firm linked to Justin Sun, drawing scrutiny from certain crypto circles.
Kraken’s entry into the wrapped Bitcoin space signifies a transformative shift not only in ambitions but also in the competitive landscape of DeFi, as it aligns with ongoing developments and possible shifts in protocol support for existing wrapped Bitcoin offerings. The company's forward-looking plans also include expanding kBTC’s cross-network compatibility, allowing potential integration with non-EVM networks, thereby enhancing its utility and adoption.
