From what I've understood, coins are wrapped to enable cross-chain movements. Let's say you have X BTC, but you want to take advantage of ERC-20 features. You can "move" your BTC to Ethereum blockchain by depositing your X BTC in Wrapped BTC (WBTC) smart contract. It'll lock your BTC, and give you the equivalent amount of WBTC tokens, which are ERC20 tokens on the Ethereum chain.