WBTC is built to track Bitcoin’s price 1:1, which invites an obvious question: if it tracks the price exactly, what’s actually different about holding WBTC instead of BTC? The short answer is custody, network, and what you can do with it once you’re holding it. This page lays out the concrete differences, covered at a higher level on the what is wrapped bitcoin homepage.
WBTC vs native Bitcoin, side by side
| Native Bitcoin | WBTC | |
|---|---|---|
| Network | Bitcoin | Ethereum (ERC-20 token) |
| Custody | Self-custody possible (you can hold your own private keys) | Backed by BTC held with a custodian (BitGo) |
| What backs it | Is the asset itself | A 1:1 claim on BTC reserves held by the custodian |
| Smart-contract / DeFi access | None natively on Bitcoin’s base layer | Full access to Ethereum’s smart-contract ecosystem |
| How you acquire it | Buy, mine, or receive BTC directly, peer to peer or via an exchange | Mint via a merchant and custodian, or acquire on an exchange/DEX |
| Getting BTC back | N/A — it is already BTC | Redemption (burn WBTC, custodian releases BTC) or a market swap |
| Typical use case | Store of value, direct peer-to-peer payment | Using BTC’s value inside Ethereum DeFi — lending, liquidity provision, collateral |
Custody, explained
The custody row is the one most people underestimate. Native BTC can be self-custodied — held with private keys only the owner controls, with no third party able to freeze or seize it. WBTC cannot be self-custodied in that same sense, because the BTC actually backing it sits with a custodian, not with the WBTC holder. Holding WBTC means holding a claim that depends on that custodian continuing to operate correctly. WBTC is not the only design choice here — the custodial vs trustless bridges page compares this model against designs that remove the single custodian entirely. That does not make WBTC untrustworthy on its own, but it is a materially different risk position than self-custodied BTC, and it’s worth reading in full on the WBTC risk profile page.
Redemption, explained
With native BTC there is nothing to “get back” — you already hold the asset. With WBTC, converting back to native BTC means going through redemption: the WBTC is burned, and the custodian releases the corresponding BTC from reserve. This process depends on the custodian and merchant infrastructure functioning, unlike a native BTC transfer, which requires no third party at all. In practice, many WBTC holders instead swap WBTC for BTC (or for another asset) on an exchange rather than using formal redemption, but the underlying backing that makes that swap possible is still the custodial reserve.
Frequently asked questions
Does WBTC always trade at exactly the same price as BTC?
It's designed to, since it's backed 1:1, but like any pegged asset it can trade slightly away from an exact 1:1 ratio, particularly during periods of stress on the custodial model.
Can I convert WBTC back to native BTC myself?
Formal redemption goes through the custodian and burns the WBTC to release BTC. In practice, many holders instead swap WBTC for BTC on an exchange, though that liquidity still ultimately depends on the custodial reserve backing WBTC.
Why would anyone hold WBTC instead of just BTC?
WBTC gives BTC's value access to Ethereum's smart-contract ecosystem u2014 lending, liquidity provision, using it as collateral u2014 none of which Bitcoin's own base layer supports natively.