Coinbase hints at launch of new synthetic Bitcoin token cbBTC amid WBTC controversy, AI predicts coinbase price to rise to $215 by year-end

Coinbase Global Inc (NASDAQ: COIN) has hinted at the launch of a synthetic Bitcoin token, "cbBTC," potentially setting the stage for increased competition in the synthetic Bitcoin market. This market is currently led by BitGo’s Wrapped Bitcoin (WBTC).

The announcement, made via a cryptic post on X (formerly Twitter), has generated considerable buzz within the cryptocurrency community. Jesse Pollak, head of Coinbase's layer-2 network, expressed a strong commitment to Bitcoin, aiming to build a "massive Bitcoin economy" on Base, Coinbase’s layer-2 network.

WBTC Controversy

The timing of Coinbase’s announcement is noteworthy, as it comes amid growing controversy surrounding WBTC. On August 9, 2024, BitGo, the custodian of WBTC, partnered with Hong Kong-based BiT Global, a firm linked to Justin Sun, the founder of Tron (TRX). This partnership has raised concerns within the decentralized finance (DeFi) community about potential centralization and Sun’s controversial reputation.

Some within the DeFi community, such as Block Analitica, have responded by suggesting a halt to new borrowing against WBTC collateral on platforms like MakerDAO. Despite reassurances from BitGo’s CEO Mike Belshe, doubts and uncertainties persist.

Market Reaction

The market has reacted to the cbBTC teaser with cautious optimism. COIN shares, currently trading at $193.81, have seen a slight daily decline of 2.09% but have risen by 5% over the past week.

coinbase price source：yahoo finance

According to AI-based analysis, the introduction of cbBTC could increase user engagement on Coinbase’s Base network, potentially driving higher trading volumes and revenue. This could push COIN shares to $215 by the end of 2024, assuming institutional interest in Coinbase’s ecosystem continues to grow.

ChatGPT-4o COIN price prediction. Source: ChatGPT/Finbold