Coinbase partners with Morpho to introduce Bitcoin-backed loans on Base
Coinbase partners with Morpho to introduce Bitcoin-backed loans on BaseCoinbase partners with Morpho to introduce Bitcoin-backed loans on Base Gino Matos · 54 seconds ago · 1 min read Coinbase partners with Morpho to introduce Bitcoin-backed loans on BaseUsers can borrow up to $100,000 in USDC through Morpho multichain money market using their Bitcoin holdings. 1 min readUpdated: Jan. 16, 2025 at 11:44 pm UTC Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.Coinbase announced a partnership with money market Morpho on Jan. 16 to offer on-chain USD Coin (USDC) loans backed by Bitcoin (BTC), according to a Jan. 16 release.The service will allow Coinbase users to borrow USDC by pledging Bitcoin as collateral. Loans are processed through the layer-2 blockchain Base. The collateral is automatically converted to Coinbase Wrapped Bitcoin (cbBTC) on a 1:1 basis and then transferred to Morpho. Borrowers can access up to $100,000 in USDC, with interest rates determined dynamically by Morpho’s market-driven mechanism. On-chain loans offer flexibility with no fixed repayment schedule, but users must monitor their loan-to-value ratio to avoid liquidation if the collateral’s value drops.Morpho is now the 12th-largest decentralized application by total value locked, reaching over $3.2 billion in 2024 with a 444% growth, according to DefiLlama data.DeFi expansionCoinbase’s initiative reflects the importance of decentralized finance (DeFi) tools to the firm’s expansion plans.In the announcement, the exchange framed the new service as a step toward bringing traditional financial tools into the crypto market. Users can convert borrowed USDC to US dollars for free. The service is also positioned as a tax-efficient alternative to selling Bitcoin, potentially enabling users to defer capital gains or losses. This aspect may appeal to investors seeking to unlock liquidity without triggering taxable events. This move follows Coinbase’s September launch of cbBTC, which allowed customers to move Bitcoin into on-chain environments. According to a Dune Analytics dashboard created user eekeyguy, cbBTC has surpassed $2.1 billion in supply since its launch, equivalent to 21,495.46 BTC. Meanwhile, Wrapped Bitcoin (WBTC) fell 13.4% in supply over the same period, although its market size is over 132,000 BTC.Mentioned in this article Author Gino Matos Reporter at CryptoSlate Gino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi). EditorAssad Jafri Editor & Reporter at CryptoSlate AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.Latest US StoriesLatest Bitcoin StoriesLatest Press ReleasesDisclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.