How to Buy Wrapped Bitcoin (WBTC) – A Beginner’s Guide

Wrapped Bitcoin (WBTC) is an ERC20 token that represents real Bitcoin (BTC) held in locked reserves. This enables investors to gain exposure to Bitcoin’s price growth while accessing Ethereum-based applications. WBTC holders can earn yields, provide liquidity, and even borrow stablecoins from DeFi loan sites.

Learn how to buy Wrapped Bitcoin in this beginner-friendly guide. Read on to discover the cheapest, safest, and most cost-effective way to invest in WBTC tokens in 2025. I also explain how Wrapped Bitcoin works, what risks to consider, and how to use it in the Ethereum ecosystem.

How to Buy Wrapped Bitcoin in 4 Easy Steps

Here’s a simple walkthrough on how to invest in Wrapped Bitcoin in under five minutes:

• Step 1: Pick an Exchange: Wrapped Bitcoin trades on the most popular exchanges, but I prefer using a non-custodial provider like Best Wallet. It doubles as a decentralized exchange (DEX), allowing users to buy WBTC tokens anonymously and securely. Therefore, the first step is to download the Best Wallet app and complete the security steps.
• Step 2: Set up a WBTC Order: Now click on the “Trabede” button followed by “Buy”. Choose a payment currency and method, like a credit card or bank transfer. Select Wrapped Bitcoin (“WBTC”) as the receiving token and type in the purchase amount.
• Step 3: Buy WBTC: Best Wallet automatically connects you with the best-priced payment gateway. You can now enter the payment details and confirm the WBTC purchase.
• Step 4: Store and Earn WBTC: Wrapped Bitcoin will automatically be added to your Best Wallet balance. It’s securely stored, with the private key encrypted on the mobile device. Best Wallet also connects with the Ethereum ecosystem, meaning you can instantly earn yields on WBTC.

How to Buy Wrapped Bitcoin – Step-by-Step Instructions

I’ll now provide a more comprehensive guide on how and where to buy Wrapped Bitcoin. Follow each step to purchase WBTC in minutes.

Step 1: Download the Best Wallet App

The first step is to download the Best Wallet app. Not only does Best Wallet support anonymous WBTC purchases with fiat money but it also connects with Ethereum’s DeFi ecosystem.

This means you can buy, store, and earn yields on Wrapped Bitcoin in one safe place. Best Wallet is free and its app is available on Google Play and the App Store. You can get the official download link from the Best Wallet website.

Step 2: Secure the Best Wallet App

You’ll need to set up and secure the Best Wallet app before buying Wrapped Bitcoin. First, enter an email address and verify your address with the code emailed to you.

Next, choose a strong PIN and write down the secret passphrase.

• The secret passphrase is 12 randomly generated words, unique to the wallet account.
• Nobody, including Best Wallet, can view the secret passphrase.
• Write it down on paper and ensure it’s never shared.
• You’ll need the secret passphrase if wallet recovery is needed (e.g. you lose the smartphone).

Now click the “Settings” button to activate additional security features. This includes biometrics and two-factor authentication.

Step 3: Set up a WBTC Purchase Order

You’ve secured the Best Wallet app, so the next step is to buy Wrapped Bitcoin. You can buy Wrapped Bitcoin directly on the Best Wallet app with fiat currencies.

Click the “Trade” button. Then click “Buy” and choose a currency (e.g., USD or AUD). In the “You Get” field, ETH is shown by default. Click “ETH” and type in “WBTC”. Ensure you choose WBTC on the Ethereum network, as other token standards exist.

The next step is to choose a payment method. Available options depend on the selected currency but generally include debit/credit cards, bank account transfers, PayPal, and Google Pay/Apple Pay.

Step 4: Review Pricing Details

After selecting the preferred payment method, Best Wallet immediately shows the best-priced fiat gateway. However, it’s wise to review the quoted price, as fees are built into the exchange rate.

In my example, 300 EUR amounts to 0.003648 WBTC. A quick check on third-party services like pricing websites shows that the spot rate for the same amount is 0.0037 WBTC. This means the quoted exchange rate is competitive.

Step 5: Buy Wrapped Bitcoin and Enjoy Safe Storage

Confirm the quote if you’re happy with the exchange rate. You will then be asked to type in the payment details, which will be handled securely by the respective fiat gateway.

The payment should be processed instantly (unless you’re doing a bank transfer). And that’s it – you’ve just learned how to buy WBTC instantly. The purchased tokens should now appear in the Best Wallet balance.

What is Wrapped Bitcoin (WBTC)?

Wrapped Bitcoin (WBTC) is a crypto token on the Ethereum blockchain, meaning it uses the ERC20 standard. It was created to unlock decentralized finance (DeFi) opportunities for the original Bitcoin. After all, the Bitcoin blockchain doesn’t support smart contracts and, by extension, decentralized applications (dApps).

This limits Bitcoin holders to just one source of income — price appreciation. While Wrapped Bitcoin also offers exposure to the Bitcoin price, it can also be used in Ethereum dApps. This means WBTC tokens can be used for staking, lending, and even borrowing funds, all while benefiting from any positive Bitcoin price movements.

Key Features

Wrapped Bitcoin is backed by real Bitcoin. It’s not a loosely pegged system like USDT, which is backed by an assortment of different crypto assets (including precious metals and secured loans).

Here’s how it works:

1. When WBTC tokens are minted, an equal amount of BTC is wrapped, meaning it’s locked in a secure custodian wallet.
2. For example, if 10,000 WBTC are created, 10,000 BTC is locked.
3. This means that each WBTC token is backed 1:1, ensuring its value aligns with the BTC price.
4. At any stage, WBTC can be redeemed for real BTC.
5. The WBTC redeemed is burned, meaning it no longer exists in the circulating supply.
6. The BTC is unwrapped and transferred to the holder’s wallet.

Crucially, there are no issues with legitimacy or misplacing funds like the FTX saga. Approved custodians hold the locked BTC, and the supply is regularly audited.

What Makes it Interesting

Wrapped Bitcoin enables holders to generate returns in two ways.

First, I mentioned that WBTC is backed 1:1 by real BTC. This means that the WBTC and BTC prices are aligned. As such, anyone holding Wrapped Bitcoin is still gaining exposure to real Bitcoin.

• For example, suppose you buy WBTC when it’s valued at $75,000. BTC is also valued at $75,000.
• A few months later, the BTC price increased to $100,000. Similarly, WBTC is also worth $100,000.
• This means you’ve benefited from BTC’s price appreciation while holding WBTC.

While the BTC price appreciates, you can put the WBTC tokens to work. This means taking full advantage of the Ethereum ecosystem, which offers various income-generating tools. For instance, you can lend WBTC to DEXs, ensuring they have sufficient liquidity. You’ll earn a share of any trading fees collected on the WBTC pair.

You can also stake WBTC, locking the tokens for a certain time frame to earn passive yields.

Another option is to deposit WBTC into a crypto loan platform and use it as collateral to borrow funds. For example, you might get a loan-to-value (LTV) ratio of 50%, allowing you to borrow $500 for every $1,000 worth of WBTC deposited. Loans can often be paid in Wrapped Bitcoin, giving you increased exposure to the real Bitcoin price.

Tokenomics

While the best cryptocurrencies to buy have a finite supply (including Bitcoin), Wrapped Bitcoin does things slightly differently. It doesn’t have a capped supply, considering new WBTC tokens are only minted when someone wraps real BTC.

When the real BTC is redeemed, the respective WBTC tokens are burned, which means they’re removed from the supply. So, the WBTC supply rises and falls based on demand and supply.

Additionally, Wrapped Bitcoin doesn’t have a proof-of-work mining system like Bitcoin. It’s an ERC20 token, meaning it uses the same proof-of-stake mechanism as Ethereum.

Community

Wrapped Bitcoin’s community is different from other projects. Most holders believe in Bitcoin’s long-term potential while wishing to increase their returns via DeFi yields. That said, Wrapped Bitcoin is backed by a decentralized autonomous organization (DAO), meaning members get to vote on any important issues.

While the WBTC DAO was created to ensure transparency, its members are institutions rather than individual token holders. Approved members include Ren, Loopring, Kyber Network, Uniswap, Maker, Blockfolio, BitGo, and others.

How to Store the Wrapped Bitcoin That You Buy?

Wrapped Bitcoin is an ERC20 token, so it must be stored in a crypto wallet compatible with the Ethereum blockchain. Choosing a “non-custodial” wallet is always the safest option, especially if you want to avoid centralized exchanges. As a non-custodial user, you essentially become your own bank, with nobody but you having access to the private keys.

Any purchased WBTC tokens will be stored privately and anonymously, as non-custodial providers don’t collect personal data. Non-custodial wallets are also required to access Ethereum’s DeFi ecosystem. This means you can earn yields on the stored WBTC without giving control away.

For example, you can connect the wallet to Aave and use the WBTC as collateral for loans or connect it to Uniswap to provide WBTC liquidity. Either way, ensure the chosen wallet offers a user-friendly experience and strong security features. The latter should ideally include two-factor authentication (2FA) and biometric logins, like facial recognition.

Once you’ve chosen and set up a wallet, a unique Ethereum address (known as the public key) will be created automatically. You can then transfer WBTC tokens to this address — check the transaction details and see the transaction complete within seconds.

Best Wrapped Bitcoin Wallets

According to my research, Best Wallet is one of the best ERC20 wallets for storing Wrapped Bitcoin. Here’s why:

Best Wallet is a non-custodial app for iOS and Android. You will have complete control of the private keys, ensuring ownership of any WBTC tokens stored. You can freely send and receive WBTC and use it for DeFi yields without third-party interference (more on that shortly). Best Wallet is also user-friendly, so it’s a good option for beginners with limited experience.

Best Wallet is protected by a wide range of security features, including 2FA, biometrics, and encrypted private keys. Users can instantly buy Wrapped Bitcoin without leaving the Best Wallet app. Payment types commonly include Visa, MasterCard, PayPal, Skrill, and bank wires. No ID is needed, meaning you skip cumbersome Know-Your-Customer (KYC) processes.

Best Wallet also offers a built-in swapping tool that has cross-chain functionality. You can swap WBTC for other ERC20 tokens like UNI, MANA, and USDT, not to mention tokens on other networks like BNB Chain, Polygon, Solana, and Base. Perhaps the best feature is that Best Wallet offers unfettered access to all Ethereum DeFi applications.

Users can visit their preferred application on the same smartphone or desktop device. WalletConnect facilitates connections, ensuring security and decentralization. The stored WBTC tokens can then be used on Uniswap, SushiSwap, Aave, Compound, Loopring, Kyber, and more. All things considered, Best Wallet is my overall top pick for WBTC.

What to do with the Wrapped Bitcoin you Buy?

I’ll now take a closer look at Wrapperd Bitcoin’s use cases in the Ethereum ecosystem.

Staking WBTC

Crypto staking is one of the most hands-off ways to generate yields on Wrapped Bitcoin. The WBTC tokens are locked for a certain time frame, which can range from a few days to several months. Some staking pools are flexible, so they can be unlocked at any time (albeit, usually at a lower APY).

Unlike ETH, WBTC can’t be staked directly on the Ethereum blockchain because it’s a secondary token. However, it can be staked through third parties, including centralized and decentralized exchanges. The latter is the best option for retaining full control of the WBTC tokens.

Provide WBTC Liquidity to DEXs

Another option is to provide WBTC liquidity to DEXs. This is a huge market, with millions of dollars in total value locked (TVL) across multiple platforms. However, do note that WBTC must be provided alongside another ERC20 token, as you’re funding a “trading pair”.

For example, the most popular trading pair is WBTC/WETH on Uniswap. You’d need equal amounts (in currency terms) of WBTC and WETH to fund this pool. Another option is WBTC/USDT, also on Uniswap. As a liquidity provider, you’ll earn a small share of trading fees whenever swaps are conducted. The tokens can usually be withdrawn at any time.

Use WBTC as Collateral for Loans

While risky, another option is to use WBTC as collateral on crypto loan platforms. The loan amount depends on how much WBTC you deposit and the available LTV ratio. For example, if you have $3,000 worth of WBTC and the LTV is 30%, you can receive up to $900 in loaned cryptocurrency.

Loans can often be received in multiple tokens, including stablecoins like USDT and USDC. WBTC is typically an option too, providing increased exposure to the Wrapped Bitcoin price. However, loans come with interest payments and liquidation risks. The latter means the loan platform sells some of the WBTC collateral if the price declines by a certain amount.

Redeem WBTC for BTC

WBTC can be redeemed for real BTC at any time. To do so, you’ll need to visit an approved merchant, the full list of which is available on the Wrapped Bitcoin website.

The WBTC tokens are initially transferred to the merchant and burned. The equivalent number of BTC is then transferred to the stated wallet address. The unwrapping process gets you back into the original Bitcoin ecosystem.

Buy WBTC Verdict – A Promising Investment?

Wrapped Bitcoin is a popular alternative to holding Bitcoin. You’ll still benefit from any BTC price increases while earning income from the Ethereum ecosystem. DeFi opportunities include liquidity provision, staking, and collateralized loans. Crucially, Wrapped Bitcoin can be redeemed for real Bitcoin at any time.

Overall, I found that Best Wallet is the best place to invest in Wrapped Bitcoin. Instant payment methods like credit cards and PayPal are accepted without uploading ID. The purchased WBTC tokens can then be used in DeFi applications, including Uniswap and Aave.

FAQs

References

1. Wrapped Bitcoin approved merchants (Wrapped Bitcoin)
2. What investors need to know about ‘staking,’ the passive income opportunity at the center of crypto’s latest regulation scare (CNBC)
3. The DeFi Ecosystem (Chainlink)

Why you can trust 99Bitcoins

10+ Years

Established in 2013, 99Bitcoin’s team members have been crypto experts since Bitcoin’s Early days.

90hr+

Weekly Research

100k+

Monthly readers

50+

Expert contributors

2000+

Crypto Projects Reviewed

Read more

Jose Aquino

Editor

Jose Rafael Aquino is a Filipino writer and entrepreneur that specializes in finance, technology, cryptocurrency, and sports. Versed in the startup tech space, he has written for websites such as The GUIDON, TradingPlatforms, StockApps, and BuyShares. Read More

Read Jose Aquino Articles