Wrapped Bitcoin (WBTC) is an ERC-20 token designed on the Ethereum blockchain enjoying a 1:1 peg to Bitcoin (BTC). It merges the power and value of Bitcoin with the flexibility of ERC20 tokens on Ethereum in a transparent, decentralized, and completely verifiable format.

WBTC puts the worlds largest cryptocurrency by market cap on the Ethereum network, giving developers and investors the power to enforce smart contracts on the crypto asset. This vastly increases the versatility of Bitcoin, allowing developers to write smart contracts that can be integrated with transferring BTC.

The ERC-20 wrapped version of Bitcoin can allow the original cryptocurrency to enter the exciting world of DeFi and dApps. The original version of Bitcoin is limited in functionality and cannot do more than being used for payment transfers.

On the other hand, Wrapped Bitcoin can be traded effortlessly on DEXs and enjoy faster transaction times than the original Bitcoin. It brings together the very best of two of the largest cryptocurrencies in the world - the value of Bitcoin and the versatility of Ethereum.

Wrapped Bitcoin is part of the Wrapped Tokens project, a joint project that was officially launched by BitGo, Kyber Network, and Ren. The institutions that form a part of the WBTC decentralized autonomous organization (DAO) are responsible for holding the keys to the multi-sig contract which controls this token.

Users can request WBTC from merchants. After the merchant performs the requisite KYC and AML procedures to verify the users identity, they can swap the Bitcoin for the Wrapped Bitcoin.

The merchant can then exchange the users Bitcoin for WBTC for use on the Ethereum network in the form of ERC-20 tokens. These ERC-20 WBTC tokens are then transferred from the merchant and into the users wallet, increasing the circulating supply of the WBTC token.

The WBTC token not only empowers Ethereum-based DEXs and DeFi ecosystem with higher levels of liquidity in Bitcoin. Unlike centralized exchanges that offer list Bitcoin and enjoy the maximum liquidity in the leading crypto coin, DEXs did not previously have access to the BTC crypto.

However, Wrapped Bitcoin makes it possible to wrap the largest cryptocurrency by market cap and offer it on the Ethereum network as a token. This empowers not only the DeFi market but also boosts innovation in using Bitcoin for several other purposes beyond a store of value or a way to enable digital transactions.

The WBTC network can have several use cases powered by the creation of smart contracts. It can also be used as an asset in decentralized applications (dApps), giving Bitcoin holders access to many more use cases than initially imagined.

The Wrapped Bitcoin cryptocurrency can be used in several ways, including:

Providing Higher Liquidity to Ethereums DeFi Ecosystem

Unlike centralized exchanges (CEXs) that have the most liquidity in Bitcoin, DEXs cannot access native Bitcoin on Ethereum. However, the Wrapped Bitcoin asset makes it possible for DeFi platforms to offer liquidity in Bitcoin, with the same value but with the added benefit that this asset enjoys as an ERC-20 token on Ethereum.

Faster Transactions

Transactions of WBTC to make payments and send and receive cryptocurrencies faster and more efficiently. The Ethereum network enjoys a higher throughput than the Bitcoin network, making transactions in WBTC more efficient than those in BTC.

It also allows merchants and payment apps to develop solutions for a single Ethereum node to accept payments in WBTC instead of coding for compatibility with Ethereum and Bitcoin networks.

Do More With Bitcoin

Bitcoin in its original form lacks the flexibility and versatility of Ethereum and is often limited by its blockchain, which only supports the use of the asset as a store of value and for the transfer of payments.

However, WBTC can allow developers to innovate new use cases for the asset through the power of smart contracts. WBTC can be supported in dApps, allowing for far more uses of the asset than its original counterpart, BTC.

Crypto Asset to Invest in and Trade

Wrapped Bitcoin is available for trading and investing in, not only on CEXs but also DEXs. You can trade WBTC against other cryptocurrencies or invest in it for the long term if you believe in the potential of Bitcoin as an asset of value to hold. Remember to check the latest Wrapped Bitcoin price, WBTC market cap, 24-hour trading volume, and news before placing a new trade in this digital asset.

Earn Passive Income

Holding WBTC also offers a lucrative way to generate a stream of passive revenue. Leading cryptocurrency exchanges and DEXs have the option to grow your WTBC holdings via liquidity mining, staking, and yield farming.

Wrapped Bitcoin has the same inherent value as Bitcoin, the world's first and largest cryptocurrency by market cap. Investing in WBTC is very similar to investing in BTC, except that it gives you the flexibility to do more with the crypto than just making payments, trading, and HODLing on different blockchains.

As Bitcoin has a fixed supply and turns even more attractive as an asset to invest in and hold among institutional investors worldwide, the value of BTC and the corresponding WBTC price could head higher. An increased interest in BTC can make Wrapped Bitcoin a sound investment to consider.

Bullish sentiment among investors towards the crypto market in general and Bitcoin, in particular, can be one of the most vital fundamentals driving up the Wrapped Bitcoin price and making it a valuable investment. In addition, the growth of the decentralized finance markets can also make WBTC even more valuable as an asset to invest in, letting you trade and invest in WBTC via DEXs and DeFi platforms.

Beyond DeFi, the rising adoption of Wrapped Bitcoin as an accepted payment method by businesses worldwide can make it an exciting crypto asset to include in your portfolio. The Wrapped Bitcoin cryptocurrency could also trend higher in price and demand as more dApps integrate this crypto for use.

Wrapped Bitcoin (WBTC) is an ERC-20 token on the Ethereum network that represents Bitcoin (BTC). Its value is tied to the price of Bitcoin. Let's explore the key distinctions between these two cryptocurrencies:

Blockchain: Bitcoin vs. Ethereum

Bitcoin (BTC) operates on its own blockchain, while Wrapped Bitcoin (WBTC) is one of several digital assets functioning within the Ethereum ecosystem.

Use Cases

Bitcoin (BTC) has limited use cases due to its inability to handle smart contracts and decentralized applications (dApps). Wrapped Bitcoin (WBTC) was created to enable programmability through smart contracts, making it usable in dApps and providing liquidity to decentralized exchanges on Ethereum.

You cannot directly convert Bitcoin into Wrapped Bitcoin using MetaMask since MetaMask is an Ethereum-based wallet and does not support Bitcoin.

However, you can use exchanges like BYDFi or DeFi platforms that facilitate BTC to WBTC swaps. The simplest way to convert BTC to WBTC is by visiting the BYDFi Spot Trading section and trading the WBTC/BTC cryptocurrency pair.

On the trading page, you can sell BTC to purchase WBTC, and then transfer the acquired WBTC from your BYDFi trading account to MetaMask for storage or further use.