WBTC expands to Hedera as Bitcoin liquidity flows into new DeFi rails

Wrapped Bitcoin (WBTC), the largest tokenized version of Bitcoin, has expanded to the Hedera network — a move that could open the door to more decentralized finance (DeFi) options for BTC holders.

The integration, announced Thursday, brings additional liquidity to Hedera, which already supports smart contracts and native tokenization and markets itself as a low-fee network with no frontrunning or miner-extractable value (MEV).

Frontrunning and MEV are tactics where validators reorder transactions to profit at users’ expense — a problem Hedera’s consensus mechanism is designed to avoid.

The launch was supported by BitGo, a Hedera Council member and the primary custodian behind WBTC, alongside BiT Global and LayerZero, an interoperability provider.

WBTC gained popularity as one of the first large-scale solutions enabling Bitcoin (BTC) holders to participate in DeFi. Wrapping allows BTC to be converted into a token on another blockchain while remaining fully backed by Bitcoin held in custody.

In theory, this allows users to deploy their BTC in smart contract ecosystems for lending, trading and other protocols without forfeiting their underlying Bitcoin exposure.

A comparison of wrapped Bitcoin solutions. Source: Cointelegraph

Hedera has experienced an uptick in DeFi activity, marked by a significant increase in total value locked over the past 12 months. Its native token, HBAR, is the 19th-largest cryptocurrency by market capitalization, with an estimated market value of about $7 billion.

Related: Prosecutors request February or March retrial for MEV bot brothers

The Bitcoin DeFi sector charts a growth path

Hedera’s move is part of a broader trend linking Bitcoin more closely to DeFi, as holders seek ways to use their assets in lending, trading and yield-generating protocols.

As Cointelegraph reported, several Bitcoin-focused companies argue that Bitcoin is too significant an asset to remain idle in wallets and will increasingly serve as the foundation of its own financial ecosystem.

“Bitcoin DeFi is about building a trustless, permissionless financial system around Bitcoin, turning it into an active financial instrument, not just a vault,” Jacob Phillips, co-founder of liquid staking protocol Lombard Finance, said at the Bitcoin 2025 conference in Las Vegas.

Binance has also highlighted the rise of the Bitcoin DeFi sector, referring to it as BTCFi, saying it may help drive new adoption of the digital asset.

Bitcoin’s total value locked in DeFi. Source: DefiLlama

The sectors’ growth “may reinforce positive sentiment for Bitcoin in the medium and long term, Binance Research said in a report.

Related: Bitcoin is infrastructure, not digital gold