On April 22, 2025, BitGo launched institutional support for sBTC, allowing qualified institutions to custody the asset and convert freely between Bitcoin and sBTC directly inside the BitGo platform. Withdrawals are scheduled to go live on April 30, 2025, completing the two-way loop.

BitGo processes over $3 trillion in transactions and manages more than $48 billion in staked assets.

What sBTC actually is, and why it’s different

sBTC is a 1:1 Bitcoin-backed token that lives on the Stacks L2 network, redeemable at any point for the underlying BTC.

The key distinction from other wrapped Bitcoin products is the custody model. WBTC, which BitGo helped launch back in 2018, relies on a centralized custodian. sBTC uses a threshold signature scheme, meaning no single party controls the peg. Instead, a network of elected signers, including BitGo, Hex Trust, and Bitfinex, collectively manage the mechanism.

BitGo is not just a user of this system. It serves as a decentralized signer for the sBTC peg itself, a role it took on following its integration with the Stacks L2 network in July 2024. That earlier groundwork is what made the April 2025 conversion feature possible.

Abishek Singh, BitGo’s Product Manager, has described the sBTC integration as a pivotal expansion of Bitcoin’s utility in decentralized finance, positioning it as a step toward making BTC a more active asset rather than one that simply sits in cold storage.

What institutions can actually do with sBTC

Once BTC is converted to sBTC inside BitGo’s platform, institutions can deploy it across a range of DeFi activities: lending, borrowing, and trading of tokenized assets on the Stacks network.

The Stacks network runs on a Proof of Transfer mechanism, which generates BTC-denominated rewards. Institutions holding sBTC get exposure to those rewards, meaning the asset earns yield denominated in Bitcoin itself.

Previously, moving Bitcoin between L1 and Stacks L2 required relying on external infrastructure and third-party custodians. Now institutions can execute that movement without leaving the BitGo ecosystem, reducing counterparty exposure and keeping the asset within a regulated custody environment the entire time.

The market read: STX moves first

STX emerged as a top performer in the immediate aftermath of BitGo’s April 22 announcement.

BitGo’s history with WBTC offers a useful reference point. When WBTC launched in 2018 with BitGo as custodian, it became one of the primary entry points for Bitcoin capital into Ethereum DeFi. sBTC’s decentralized model is structurally different, but the pattern of a large custodian enabling institutional flows into a new DeFi ecosystem is the same playbook.