Before diving into the cryptocurrency industry and setting up a digital wallet, you need to know that not all wallets are made equal. Metmask is one of the industry standards for non-custodial crypto wallets.
But here’s why you might want to think twice about installing Metmask if you want to invest in Bitcoin.
Native Bitcoin cannot be stored directly in your Metamask wallet as Metamask is built on the ERC-20 network which is part of the Ethereum blockchain. Even though Bitcoin and Ethereum are the two largest cryptocurrencies in the world, their networks are not actually directly compatible with each other.
It’s certainly a confusing way to start your cryptocurrency journey. When trading assets like stocks, most brokerage account can hold securities such as stocks, ETFs, mutual funds, or options contracts. Crypto networks on the other hand are a little bit more specific and generally speaking, most native tokens only work on their respective blockchains.
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Can Metamask Hold Bitcoin (BTC)?
So while the answer to this question is no, because Metamask cannot support native Bitcoin tokens, there are ways to store your Bitcoin on your Metamask wallet. If separate tokens for separate blockchains wasn’t confusing enough for new crypto traders, it’s time to talk about how we can get the two networks to cooperate.
Developers have created a token called Wrapped Bitcoin or WBTC, which is backed 1:1 with the price of native Bitcoin or BTC. The only difference is that once it has been wrapped, it is an ERC-20 token, which means you can now store your WBTC in Ethereum-based wallets like Metamask.
Is it worth the hassle to wrap your Bitcoin just to store it in your Metamask wallet? I recommend storing any significant crypto investments in cold storage, which is a crypto wallet that is not connected to the internet. WBTC does have its perks, as the Ethereum network has many more options when it comes to staking and Decentralized Finance.
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Why Can’t You Hold Bitcoin in Metamask?
Back to native Bitcoin and BTC.
Even though it is the world’s largest, and most popular, cryptocurrency by market cap, native Bitcoin is actually quite limited in its technology. The Bitcoin ecosystem isn’t nearly as diverse as Ethereum, and lacks projects like NFTs and DeFi that can really add additional value to your initial investment.
The main reason you cannot hold Bitcoin in your Metamask wallet is because Metamask is based on the Ethereum network. This means that only ERC-20 projects or other blockchains that use the EVM or Ethereum Virtual Machine can use Metamask. This includes blockchains like BEP-20 from the Binance Smart Chain, Harmony, Fantom, and Avalanche.
While all of these different blockchain protocols can be stored in Metamask, you still need to add each network as a separate sub-wallet. Changing from the Ethereum Mainnet to the Harmony Mainnet, allows you to utilize your Metamask wallet on Harmony blockchain projects. This is one of the reasons why Metamask is such a popular tool for crypto investors.
What Happens If You Send Bitcoin to MetaMask?
A great question! Accidental transfers of cryptocurrencies happen all the time, so what happens when you send Bitcoin to an Ethereum-based wallet like Metamask? There’s a lot of different outcomes here so let’s just start by saying: don’t ever do this.
There is a really good chance that your Bitcoin will never be recovered, and Metamask even says this in its support page.
Depending on where you sent your Bitcoin from, your tokens are likely being stored as a ‘synthetic’ Bitcoin token that can’t yet be seen. For example, if you send it from Binance, it will automatically convert or ‘wrap’ the Bitcoin into the token BTCB under the Binance Smart Chain. You’ll need to add the BTCB token to your Metamask wallet but once you do, the value of your Bitcoin will likely be found.
Remember, this is a lucky outcome if it happens.
So when you are sending cryptocurrencies from wallet to wallet, take care in determining which blockchain you are sending from and which blockchain you are sending to. It also helps to send a small amount first just to make sure your transaction goes through.
After it does, then you can proceed with the rest of your transfer.
This is what I usually do. As an NFT investor myself, I have sent large sums of money from my Coinbase account to my Metamask wallet, and while it might not be the most budget friendly way of doing it, I always send a small amount first to make sure I have my addresses lined up correctly, then I transfer the rest.
Related Financial Geek Article: Do You Actually Own Bitcoin (BTC) on Coinbase?
Is MetaMask Safe?
As far as hot digital wallets go, Metmask is one of the safest you can use. Metmask does not use remote storage for your wallet keys and instead stores them remotely on the web browser that Metamask is installed in. Rather than store all of that data in one remote space, Metmask entrusts the safety of the wallets to the individual users themselves.
At the end of the day, Metamask is still a hot wallet, which means it is connected to the internet. Any wallet that is connected to the internet is always at risk of being hacked or compromised. This is why I recommended earlier that any crypto investments should always eventually be stored in a cold wallet.
The local storage of wallet keys is also why you rarely hear about a widespread Metamask hack. Usually it is only individual users who have been compromised by malware or a phishing attack from their own computer. In this way, Metmask has a safe network and it’s up to you to not be compromised by malicious threats.
Recommended Financial Geek Reading: Is Coinbase Safe? Is Coinbase Legit? (Here’s the Truth)
Conclusion: Can Metamask Hold Bitcoin
I covered why native Bitcoin tokens cannot be stored on the Metamask wallet. I also covered a way to wrap your Bitcoin to make it WBTC which is compatible with Metamask on the Ethereum mainnet.
The Metamask wallet is only for Ethereum and Ethereum-compatible blockchains of which Bitcoin is not one. And while there are ways to get your Bitcoin onto Metmask, my suggestion is to just find a different wallet or cold storage to store your Bitcoin investment.
And will call it there. Thanks for reading Geekers, I really hope this article provided you with some value.