Why You Might Want to Buy BTC and ETH on Other Blockchains

Investors are buying wrapped BTC and ETH with crypto on blockchains like BNB, SOL, and AVAX to avoid fees and possibly taxes.

Wrapped Bitcoin
Kari Shea

Investors who want to acquire BTC and ETH using assets on other blockchains, such as BNB Smart Chain and Solana, are using wrapped BTC and ETH tokens to gain exposure to Bitcoin and Ethereum.

So why buy wrapped Bitcoin on the Avalanche blockchain instead of cashing out your AVAX or Avalanche-native tokens for fiat and then buying BTC with it? It depends. If all your assets are on a centralized exchange like Coinbase, you could probably swap AVAX for BTC for free.

But if you're into Avalanche's decentralized finance (DeFi) ecosystem, and you hold Avalanche blockchain assets like Wonderland (TIME), you'll likely incur high fees exiting the Avalanche blockchain. After that, you'll pay more fees to buy BTC. In this case, it would be cheaper to hold wrapped BTC on the Avalanche network. Plus, you could earn 31% APY if you keep it on YieldYak.

In the United States, most crypto-to-crypto transactions are taxable events, but in some jurisdictions investors may benefit from converting existing assets to wrapped BTC or ETH on their existing assets' blockchains.

Investors who wish to stake or yield farm wrapped tokens can swap their blockchain-native assets for the wrapped tokens at a decentralized exchange, such as PancakeSwap or Raydium.

Below are the best current rates for high-liquidity yield farms, lending platforms, and liquidity pools featuring wrapped BTC and ETH alone or pairing wrapped BTC and ETH with stablecoins, to minimize or eliminate impermanent loss.

BNB Smart Chain Wrapped BTC and ETH Yields

Protocol Asset Liquidity Yield
PancakeSwap BTC $67M 10%
ETH $26M 10%
MDEX BTC $43M 14%
ETH $46M 14%
BiSwap BTC $17M 15%
ETH $16M 14%

Solana Wrapped BTC and ETH Yields

Protocol Asset Liquidity Yield
Orca BTC $2M 14%
ETH $10M 12%
Raydium ETH $14M 15%
Atrix BTC $3M 🔥25%

Avalanche Wrapped BTC and ETH Yields

Protocol Asset Liquidity Yield
YieldYak BTC $135k 🔥31%
ETH $1.4M 2%
Benqi BTC $200M 1%
ETH $215M 1%