What Is Wrapped Bitcoin (WBTC)? How It Works and Its Risks
What is WBTC? How wrapped bitcoin is minted and redeemed, the 2024 BiT Global custody change, cbBTC, tBTC and LBTC alternatives, and the risks.
Wrapped Bitcoin (WBTC) is an ERC-20 token on Ethereum that is backed 1:1 by bitcoin held with a custodian. Each WBTC is meant to be redeemable for one BTC, which lets bitcoin holders use their BTC in Ethereum DeFi apps such as lending markets and DEXs without selling it. The trade-off is trust: you rely on the custodians and approved merchants that mint and burn the token.
As of 17 October 2026, WBTC was backed by about 116,500 BTC, worth roughly $9.49 billion, according to DefiLlama. That makes it still the largest wrapped bitcoin, although its backing has fallen from about 154,700 BTC in August 2024, when a custody change sparked a backlash and new rivals arrived.
What is WBTC?
Bitcoin runs on its own blockchain, which cannot natively run Ethereum smart contracts. To use BTC as collateral on an Ethereum lending market, or to trade it on an Ethereum DEX, you need a token on Ethereum that represents it. WBTC was the first major answer.
WBTC was announced on 26 October 2018 as a joint initiative by BitGo, Kyber Network and Ren (then called Republic Protocol), and went live on Ethereum on 31 January 2019, according to the launch press release. BitGo was the initial custodian, and eight merchants, including Kyber, Ren, AirSwap and Set Protocol, handled conversion between BTC and WBTC at launch.
On Ethereum, WBTC is a standard ERC-20 token with eight decimals, the same as bitcoin. On 17 October 2026 its Ethereum contract reported a total supply of about 116,132 WBTC (an on-chain totalSupply read of contract 0x2260…C599). It has also been issued on other networks, including TRON, per wbtc.network.
How WBTC minting and redemption work
WBTC has three types of participant:
- Custodians hold the BTC that backs the supply in multi-signature cold storage.
- Merchants are identity-verified institutions that can ask the custodian to mint or burn WBTC. The WBTC site says merchants are "approved through DAO governance" and names firms such as Galaxy, Amber Group, Wintermute and Cobo.
- Users buy or sell WBTC from merchants, exchanges or DEXs, and use it in apps.
A mint works like this: a merchant sends BTC to the custodian's address, the custodian confirms the deposit, and new WBTC is minted on Ethereum to the merchant. A burn reverses it: only a merchant address can call the burn function, which destroys its WBTC, and the custodian then releases the same amount of BTC. The WBTC whitepaper says mints and burns are expected to complete within 48 hours of submission to the custodian. Ordinary users do not mint directly; they trade with merchants or on the open market, and arbitrage keeps the price close to BTC.
Because every mint and burn is visible on both chains, anyone can compare the BTC held in custody addresses with the WBTC supply. The project has published proof of reserves at wbtc.network since 2019, per BitGo. Proof of reserves shows the coins exist; it does not prove who controls the keys or what would happen in a legal dispute.
The 2024 BiT Global custody change
On 9 August 2024 BitGo announced it would move WBTC to what it called "multi-jurisdictional and multi-institutional custody" through a joint venture with BiT Global, a Hong Kong custody firm. Custody, until then in the United States, would extend to Hong Kong and Singapore, BitGo would be a minority shareholder in the new venture, and the change would take effect after a 60-day transition, according to BitGo's announcement.
BiT Global's links to Justin Sun and the TRON ecosystem triggered an immediate reaction. Sun said he did "not control the private keys to the WBTC reserves", and BitGo's CEO said BitGo still signs all transactions, according to ForkLog. Risk firm BA Labs still warned of an "elevated level of risk" and proposed that MakerDAO stop new borrowing against WBTC collateral.
Coinbase went further. In November 2024 it announced it would delist WBTC, citing an "unacceptable risk that control of WBTC would fall into the hands of Justin Sun". BiT Global sued, but on 18 December 2024 a US judge declined to block the delisting, according to Decrypt. In June 2025 BiT Global dropped the case with prejudice, each side paying its own costs, according to The Block.
The episode did not show that WBTC was under-backed. It showed that a custodial token's risk depends on who holds the keys and in which jurisdictions, and that this can change by announcement.
WBTC alternatives: cbBTC, tBTC and LBTC
Several rivals now compete for the same role. The main design question is who you are trusting.
| Token | Issuer | Trust model | Size (17 Oct 2026) |
|---|---|---|---|
| WBTC | BitGo / BiT Global joint venture | Custodial, merchant mint/burn | ~116,500 BTC (~$9.49bn) |
| cbBTC | Coinbase | Custodial, single company | ~94,900 BTC in Coinbase Bridge |
| tBTC | Threshold Network | Rotating threshold signer group | ~$344m TVL |
| LBTC | Lombard | Institutional consortium, yield-bearing | ~$626m TVL |
Figures are from DefiLlama's WBTC, Coinbase Bridge, tBTC and Lombard LBTC listings on 17 October 2026. DefiLlama's Coinbase Bridge listing covers all of Coinbase's wrapped assets; the BTC line is the backing for cbBTC.
- cbBTC launched on 12 September 2024 on Ethereum and Base, backed 1:1 by bitcoin held by Coinbase, with Aave, Compound, Morpho and Curve among the launch integrations, according to The Block. It replaces one custodian with another rather than removing custody.
- tBTC uses a randomly selected group of node operators that must reach a threshold majority before they can move the bitcoin, with operators rotated every two weeks. Minting and redemption carry a 0.2% fee, per the Threshold docs.
- LBTC is a yield-bearing bitcoin token from Lombard. DefiLlama describes it as backed 1:1 by native BTC and secured by a multi-institution security consortium, with Anchorage and Kraken among its custodians. Yield adds a second layer of strategy risk on top of custody.
None of these is risk-free. "Decentralised" designs swap custodian risk for smart contract and signer-set risk.
Risks of holding WBTC
- Custodian risk. If the BTC in custody were lost, seized or frozen, WBTC would lose its backing. You cannot redeem it yourself; only merchants can.
- Governance and control risk. As 2024 showed, the parties controlling keys can change, and integrations can drop the token in response.
- Depeg risk. WBTC tracks BTC through arbitrage. If redemptions slow or confidence drops, it can trade below BTC.
- Bridge risk. WBTC on chains other than Ethereum usually travels through a crypto bridge, adding that bridge's security model on top.
- DeFi risk. Once you lend or pool WBTC, you also take on that protocol's smart contract and liquidation risk.
If you only want to hold bitcoin, native BTC in self-custody avoids all of these layers. Wrapped BTC makes sense when you specifically want to use bitcoin in DeFi.
WBTC on Sui and where JewelSwap fits
WBTC can be bridged from Ethereum to Sui through Sui Bridge, which is secured by Sui's validator set rather than a separate multisig. Sui announced support on 3 February 2025 and named Bluefin, NAVI and Suilend as apps supporting it from day one, according to the Sui blog. Bridged WBTC on Sui still depends on WBTC's custody on Ethereum, plus the bridge.
On JewelSwap, the Sui side includes a Scallop leveraged farm on the sbwBTC–zwBTC pair, which pairs two wrapped BTC tokens on Sui. A same-asset pair limits price exposure between the two legs, but leverage, liquidation and the custody of both wrappers still apply. For a wider view of earning on bitcoin, see our bitcoin yield guide.
Frequently asked questions
What is WBTC in simple terms?
WBTC, or Wrapped Bitcoin, is a token on Ethereum that represents one bitcoin held by a custodian. It lets bitcoin holders use BTC in Ethereum DeFi apps, such as lending markets and DEXs, without selling their bitcoin.
Is WBTC the same as bitcoin?
No. WBTC tracks the price of bitcoin and is backed 1:1 by BTC in custody, but it is a separate token on another blockchain. Its value depends on the custodians holding the BTC and on merchants being able to redeem it.
Who controls WBTC?
BitGo has been WBTC's custodian since launch. In August 2024 BitGo announced that custody would move to a joint venture with Hong Kong firm BiT Global, which has links to Justin Sun, with operations in the US, Hong Kong and Singapore. Approved merchants handle minting and burning.
Why did Coinbase delist WBTC?
Coinbase announced in November 2024 that it would delist WBTC, citing an unacceptable risk that control of WBTC would fall to Justin Sun after the BiT Global custody change. A US judge declined to block the delisting, and BiT Global dropped its lawsuit in June 2025.
What is the difference between WBTC and cbBTC?
Both are custodial bitcoin tokens backed 1:1 by BTC. WBTC is issued by BitGo and BiT Global through approved merchants. cbBTC, launched on 12 September 2024, is issued by Coinbase alone, and Coinbase customers can convert between BTC and cbBTC directly.
Can I use WBTC on Sui?
Yes. WBTC can be bridged from Ethereum to Sui through Sui Bridge, which Sui announced in February 2025. On Sui it can be lent, borrowed or traded in apps such as NAVI, Suilend and Bluefin, but it still relies on WBTC's custody on Ethereum.
Keep reading
- Bitcoin yield in DeFi (2026)
- What is a crypto bridge?
- Delta-neutral yield farming
- Proof of reserves explained
- Address poisoning scams explained
This article is educational and is not financial advice. Supply, TVL and price figures are as of 17 October 2026 from DefiLlama and on-chain data, and they change daily. Sources are linked inline.
