What Is Wrapped Bitcoin (WBTC)? How It Works, Uses and Risks

WBTC works through three main participants:

• Custodians: Hold the Bitcoin that backs WBTC and approve minting and burning.
• Merchants: Request the creation or burning of WBTC and work with users.
• WBTC DAO: Historically managed the system and approved participants.

This system separates those who hold Bitcoin from those who request a new WBTC.

There are two main processes: minting and burning.

Minting: How BTC Becomes WBTC

Minting creates new WBTC when an equal amount of BTC is deposited with a custodian.

1. An authorized merchant requests the creation of WBTC.
2. The required BTC is sent to the custodian.
3. The deposit is verified. The custodian confirms that the required BTC has been received.
4. WBTC is minted. An equivalent amount of WBTC is issued on the relevant blockchain.
5. WBTC is distributed. The merchant can deliver the tokens to the intended recipient.

Regular users don't need to go through this process. They can simply get WBTC through a crypto exchange or swap service.

Burning: How to Redeem WBTC for BTC

Burning is the opposite of minting. WBTC is removed from circulation, and the same amount of BTC is released.

1. An authorized merchant submits a redemption request.
2. The corresponding WBTC is transferred for burning.
3. The tokens are permanently removed from circulation.
4. The custodian verifies the burn and authorizes the release of BTC.
5. The underlying Bitcoin is transferred to the designated recipient.

The amount of WBTC in circulation decreases as the corresponding BTC is released.

Burning WBTC is different from swapping WBTC for BTC.

When you swap WBTC for BTC through an exchange service, you receive existing BTC. The service uses available liquidity, so no WBTC needs to be burned.

What Backs WBTC? Custody and Proof of Reserves

Each WBTC is backed by BTC held by institutional custodians. The amount of Bitcoin in reserves must be at least equal to the total WBTC in circulation.

Unlike native BTC, WBTC depends on these institutions to keep the underlying Bitcoin safe.

Who Holds the Bitcoin Backing WBTC?

BitGo was the original WBTC custodian.

• In August 2024, BitGo partnered with BiT Global to expand WBTC custody across different jurisdictions.

• In March 2026, BiT Global announced plans to manage WBTC reserves using BitGo's wallet infrastructure. Under this plan, BiT Global would control two of the three keys needed to manage the reserves, while BitGo would hold the third.

This setup uses multi-signature security, meaning multiple keys are involved in authorizing transactions. However, users still need to trust the institutions holding those keys.

In October 2026, WBTC announced that it was exploring a multi-custodian model to reduce reliance on a single provider. The company has not yet announced which additional custodians it will select.

How to Check WBTC Proof of Reserves

WBTC has a public Proof of Reserves dashboard where users can check its reported backing and token supply.

As of November 5, 2026, WBTC had slightly more BTC in reserves than WBTC in circulation.

This small difference may be caused by the timing of minting and burning operations.

To examine WBTC reserves:

1. Open the official WBTC transparency dashboard.
2. Compare the total BTC reserves with the total WBTC supply.
3. Review the listed Bitcoin custody addresses.
4. Check the minting and burning records for recent changes.
5. Verify relevant transactions and token contracts using blockchain explorers.

Wrapped Bitcoin vs Bitcoin (WBTC vs BTC): What's the Difference?

WBTC and BTC are designed to have the same value, but they work differently.

The main difference is who holds the Bitcoin.

When you keep BTC in your own wallet, you control it directly through your private keys.

When you hold WBTC, you control the tokens, but the actual Bitcoin is held by a custodian.

What Can You Do With Wrapped Bitcoin?

WBTC allows Bitcoin holders to use their assets in DeFi apps.

Use WBTC as Collateral for Loans

Some DeFi platforms let users deposit WBTC as collateral to borrow other cryptocurrencies.

For example, you can deposit WBTC on Aave and borrow stablecoins, depending on the platform's requirements.

This lets you access other assets without selling your Bitcoin exposure. If the value of your WBTC falls too much, the platform may sell your collateral to cover the loan.

Learn more about borrowing against Bitcoin

Lend WBTC

Platforms like Aave or Compound may allow users to lend WBTC and earn interest.

It works as with any other crypto – users deposit WBTC, which other people can borrow. Interest rates change based on demand and available liquidity.

Trade WBTC on Decentralized Exchanges

Native BTC can't be traded directly on Ethereum-based exchanges like Uniswap because Bitcoin and Ethereum use different networks.

WBTC makes this possible by allowing users to trade Bitcoin's value on Ethereum.

For example, users can swap WBTC for ETH on Uniswap without leaving the Ethereum network.

Provide Liquidity

WBTC holders can add their tokens to liquidity pools on DeFi platforms. In return, they may earn a share of trading fees or other rewards.

WBTC cannot be staked directly because it is not a proof-of-stake cryptocurrency. Any rewards come from DeFi platforms or other third-party services, not from staking on the Bitcoin network.

Which Networks Support Wrapped Bitcoin?

WBTC was first launched on Ethereum but is now available on other networks.

As of November 2026, the official WBTC dashboard lists the following networks as authorized:

For the full list of supported networks and integrations, explore the official WBTC ecosystem.

Before sending WBTC, verify the exact token contract and destination network. A wallet supporting Ethereum WBTC does not automatically support every token named WBTC on another blockchain.

How to Move WBTC Between Networks

WBTC can be moved between supported blockchains using cross-chain bridges or swap services.

A traditional crypto bridge may lock tokens on one network and issue an equivalent amount on another. Some bridges also use burning and minting.

Other services, like ChangeNOW, use available liquidity to exchange tokens between networks instead.

For example, if you want to move WBTC from Ethereum to another supported network through ChangeNOW, here's how it works:

1. Choose your networks. Open ChangeNOW and select WBTC on Ethereum as the asset you want to send. Then choose the asset and network you want to receive.
2. Enter the amount. Check the estimated amount you'll receive and the exchange rate.
3. Add your wallet address. Enter the receiving wallet address on the destination network.
4. Send your WBTC. Transfer WBTC to the deposit address provided by ChangeNOW.
5. Receive your tokens. ChangeNOW processes the exchange using available liquidity and sends the output asset to your wallet on the destination network.

Bridge WBTC (ETH) to ETH

Unlike a traditional lock-and-mint bridge, ChangeNOW doesn't directly issue new WBTC as part of this swap.

ChangeNOW currently supports WBTC on Ethereum, Arbitrum One, Polygon, Optimism, and Solana.

Before making a transfer, always check the destination network, token contract, exchange rate, fees, and whether your wallet supports the receiving asset.

To learn more, read our guide to cross-chain crypto bridges.

Bridge WBTC with the ChangeNOW Mobile App

Cross-chain swaps are now available in the ChangeNOW app for Android and iOS.

You can move WBTC between supported networks or swap it for other cryptocurrencies on a different blockchain.

Just open the app, choose your tokens and networks, enter the amount and wallet address, and make the swap.

Get ChangeNOW App

Is Wrapped Bitcoin Safe? Key Risks Explained

WBTC has many advantages, but it also comes with extra risks compared to holding native BTC.

Here are the main risks to know before using WBTC.

Custodial and Centralization Risk

The Bitcoin backing WBTC is held by custodians. If a custodian gets hacked, loses access to funds, or faces legal restrictions, users may have problems converting WBTC back to BTC.

Multi-signature security and public reserve data help reduce some risks, but users still depend on the institutions holding the Bitcoin.

In November 2022, BitGo declined a request from Alameda Research to redeem 3,000 WBTC (around $50 million) because the required security checks were not completed. The BTC remained safely in custody. The case shows an important difference: sending BTC from your own wallet doesn't require a custodian's approval, while redeeming WBTC through the official process does.

Smart Contract Risk

WBTC exists as a token governed by smart contracts on supported networks.

A vulnerability in a token contract, DeFi application, or related integration could result in unauthorized transactions or loss of funds.

In March 2023, hackers exploited a vulnerability in the Euler Finance lending protocol and stole around $197 million, including approximately $19 million in WBTC. The issue was in Euler's smart contracts, not WBTC itself. The stolen funds were later recovered.

Even if the underlying BTC reserves remain secure, a failure in an application using WBTC can still affect users.

Depegging Risk

WBTC is designed to have the same value as BTC, but their prices can sometimes differ.

If users become worried about WBTC's reserves or the ability to exchange it back to BTC, its price may fall below Bitcoin's.

For example, in November 2022, WBTC traded at a discount of up to 1.5% after the FTX collapse. Users were concerned about its backing, even though BitGo confirmed that WBTC was still fully backed by Bitcoin.

This shows that WBTC can temporarily lose its price peg to BTC even when its reserves are safe.

Cross-Chain Bridge Risk

Moving WBTC between blockchains can involve bridges, which may have security vulnerabilities.

An exploit could compromise the assets backing a bridged representation.

In that situation, the tokens can remain visible in users' wallets while losing some or all of their backing.

This is why checking token balances alone is not enough to determine whether a bridged asset remains fully redeemable.

Read about real bridge hacks and how they happen in our cross-chain bridge exploits guide.

Regulatory and Redemption Risk

WBTC custodians and merchants must follow laws and security rules.

Changes in regulations or company policies may affect who can create WBTC or exchange it back for BTC.

Holding WBTC doesn't mean you can redeem it directly with a custodian. The official redemption process is generally handled by approved merchants.

WBTC Alternatives: cbBTC, tBTC and Other Wrapped Bitcoin Tokens

Other tokens work in a similar way but use different systems to hold and protect the Bitcoin backing them.

WBTC and cbBTC rely on institutions to hold their Bitcoin reserves. tBTC uses a group of operators to share control of the BTC instead.

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