What Is Wrapped Bitcoin? WBTC, cbBTC and tBTC Explained

By Step Exchange Research · October 21, 2026 · 2 min read

What Is Wrapped Bitcoin? WBTC, cbBTC and tBTC Explained

Wrapped bitcoin is a token on another blockchain, most often Ethereum, that represents bitcoin held in reserve, so that BTC can be used in DeFi apps, swaps and lending outside the Bitcoin network. The main versions are WBTC (custodied through BitGo and partners), cbBTC (issued by Coinbase since September 2024) and tBTC (minted by the Threshold network’s decentralized signers). Each tracks bitcoin’s price, but adds custody and smart contract risk that native bitcoin does not have.

Key Takeaways

  • Purpose: use bitcoin on networks like Ethereum, Base and Arbitrum.
  • Backing: one token per bitcoin held in reserve, verified differently by each issuer.
  • Trust: custodial (WBTC, cbBTC) or decentralized signers (tBTC).
  • Use case: DeFi and quick trading; native BTC for long-term self-custody.

Wrapped Bitcoin Versions Compared

WBTCcbBTCtBTC
Issuer / custodyBitGo and partnersCoinbaseThreshold network signers
ModelCustodialCustodialDecentralized threshold signing
NetworksEthereum and othersBase, Ethereum, othersEthereum and others
Launched201920242020 (v2 2023)

How Wrapping Works

  1. Bitcoin is deposited with the custodian or protocol.
  2. Tokens are minted on the destination network, one per bitcoin.
  3. Redeeming burns the tokens and releases the bitcoin.

The 2024 WBTC Custody Change

In August 2024 BitGo announced it would move WBTC custody into a joint venture involving BiT Global, linked to Tron founder Justin Sun, which drew criticism over concentration of control. Coinbase launched its own cbBTC the following month and later moved to delist WBTC. The episode is a reminder that custodial wrapped tokens depend on who holds the keys.

When to Use Wrapped BTC

  • Yes: swapping or lending on EVM networks, using BTC in DeFi, quick trades.
  • Probably not: long-term savings, where native bitcoin in self-custody avoids custodian risk.

Getting native bitcoin instead is covered in how to swap USDT to BTC and how to swap BTC to ETH. Issuer details: Coinbase cbBTC.

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FAQ

What is wrapped bitcoin?

Wrapped bitcoin is a token on another network, such as Ethereum, that represents bitcoin held in reserve by a custodian or protocol. It lets bitcoin be used in DeFi apps outside the Bitcoin network.

Is WBTC the same as BTC?

It tracks BTC's price because each token is meant to be backed one-to-one by bitcoin, but it is a different asset with extra risks: custody of the reserves and the smart contracts on its network.

What is the difference between WBTC and cbBTC?

Both are custodial wrapped bitcoin. WBTC is managed through BitGo and its partners; cbBTC is issued by Coinbase. Each relies on its custodian holding the backing bitcoin.

Is wrapped bitcoin safe?

It carries custodial and smart contract risk on top of bitcoin's price risk. Many people use it for DeFi activity and keep long-term holdings as native bitcoin in self-custody.

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