Wrapped Bitcoin (WBTC): Bitcoin value on Ethereum

Wrapped Bitcoin is a token that tracks the price of BTC and is intended to be redeemable one-to-one, but lives on Ethereum as an ERC-20 rather than on the Bitcoin network. Each WBTC is backed by BTC held by custodians, which is what lets it stand in for Bitcoin inside smart-contract ecosystems.

The reason it exists is simple: Bitcoin doesn't run Ethereum-style smart contracts, so BTC can't directly interact with Ethereum DeFi. Wrapping BTC into WBTC bridges that gap, letting Bitcoin value be swapped, supplied, or used as collateral on Ethereum and beyond.

Because WBTC is an ERC-20, swapping it into or out of assets like ETH and stablecoins is a same-chain swap on Ethereum or an L2 that hosts it. Multiswap compares those routes and ranks them by net received after gas.

Moving between native BTC and WBTC is a different operation. It crosses from the Bitcoin network to an EVM chain, which is a cross-chain route. Multiswap compares those cross-chain paths too, so switching between the two forms of Bitcoin is one comparison rather than a manual wrap-and-bridge.

The value of WBTC rests on the promise that each token is backed by real Bitcoin. That backing runs through a custodial model: BTC is held in custody, and approved participants mint new WBTC when Bitcoin is deposited and burn it when the underlying BTC is redeemed. The supply on Ethereum is meant to track the Bitcoin held in reserve.

This is the trade-off to understand before you hold it. WBTC gives Bitcoin the reach of an ERC-20, but its one-to-one link to BTC depends on the custodian and the mint-and-burn process rather than on the Bitcoin network itself. That is a different trust assumption from holding native BTC, and it is the main thing to weigh when choosing between the two.

WBTC tracks BTC's price but isn't the same thing operationally. Native BTC settles on the Bitcoin network with its own confirmation times and no smart-contract functionality. WBTC settles on EVM chains at EVM speeds and can plug into DeFi, at the cost of relying on the custody model that backs the wrapper.

Choose WBTC when you want Bitcoin exposure inside Ethereum's ecosystem, and native BTC when you want the asset on its own chain. Swapping between them is straightforward when you treat it as the cross-chain move it is.