Kraken has introduced a new wrapped Bitcoin product, kBTC, to tap into the rapidly expanding sector, according to an Oct. 17 statement.
kBTC is a fully-backed, cross-network-compatible ERC-20 token representing Bitcoin. Each kBTC is backed 1:1 by an equivalent amount of Bitcoin, stored securely in Kraken's custody, with on-chain reserves available for public verification. The token has undergone audits by the security firm Trail of Bits.
Kraken emphasized that the launch of kBTC aligns with its mission to promote global crypto adoption. The product leverages Bitcoin's strengths while expanding its use cases into DeFi and other blockchain ecosystems. The firm's launch partners include deBridge, Definitive, Gauntlet, ParaSwap, and Yearn.
Kraken stated:
“kBTC provides a secure, fully-backed solution that unlocks Bitcoin's unparalleled value and potential across a diverse range of ecosystems.”
kBTC can be used across decentralized applications (dApps) through its compatibility with networks like Ethereum and OP Mainnet. Kraken also plans to extend its compatibility to other blockchain ecosystems, including non-EVM networks.
The latest on-chain data shows the total supply of kBTC is 100 BTC, valued at approximately $6.75 million. Of this, 80 kBTC is circulating on the Ethereum network, held by 17 wallets, while the remaining 20 kBTC resides on the OP Mainnet, with 11 holders.
Rising competition for WBTC
Kraken's entry into the wrapped Bitcoin space comes amid intensifying competition in this market, which is looking to challenge the dominance of BitGo's Wrapped Bitcoin (WBTC), which currently controls 90% of the market with a $10 billion market capitalization.
In September, Coinbase launched its own wrapped Bitcoin, cbBTC, on Ethereum and Base. Around the same time, 21.co, the parent company of 21Shares, released its wrapped Bitcoin product, 21BTC.
The recent surge in wrapped Bitcoin offerings began after BitGo announced a controversial partnership with Hong Kong-based BiT Global in August, a firm connected to Tron founder Justin Sun.
The move caused concern among some in the crypto community, particularly regarding Sun's involvement. As a result, DeFi protocols like Sky (formerly MakerDAO) and Aave are considering discontinuing support for WBTC on their platforms.