Ledger enables borrowing against wrapped Bitcoin across 4 Ethereum markets
Key Facts
The "Crypto Loans" service began rolling out within Ledger Wallet on October 7, 2026, according to an announcement by Morpho, allowing users to access stablecoin liquidity while retaining exposure to Bitcoin throughout the loan term. Ledger said in its update dated the same day that users could borrow USDC or USDT directly within the wallet. The service accepts cbBTC and wBTC, both wrapped versions of Bitcoin, as collateral. At launch, the integration covers 4 markets on Ethereum, pairing each accepted collateral asset with each available borrowing currency. Morpho provides the lending infrastructure, while Yield handles the technical integration within Ledger Wallet, according to the protocol's announcement.
The wallet allows users to simulate a loan before committing to it, according to Ledger's update. It also displays the loan-to-value ratio and provides position management tools, including adding collateral, repaying debt or increasing borrowing. Morpho said users could repay their loans and withdraw their collateral as long as their positions remained healthy. Borrowing costs remain variable, with interest rates determined by liquidity utilization in the isolated lending markets underpinning the service, according to Ledger. Availability depends on the user's country, while the company describes itself as a technology provider and does not offer financial advice.
Ledger warns that collateral "will be automatically liquidated if the liquidation threshold is reached," according to its explanation of the borrowing mechanism. Converting Bitcoin into a wrapped version also adds a custodian and a conversion step to the process. Private keys remain within the user's signing device, according to the company. The clear signing feature displays transaction details in readable language on the device's secure screen before approval. Risks identified by Ledger also include smart contract bugs, price oracle failures and exploits, which could affect collateral even when users follow the steps correctly.
"Crypto Loans" is the second lending product powered by Morpho within Ledger Wallet, following "Stablecoin Earn," according to the protocol. Stablecoins deposited through the yield service increase the liquidity available to borrowers using the lending service. The integration comes amid growth in Morpho's total deposits, which it said exceeded $14 billion during August, a record at the time. It added in its September update that deposits surpassed $15 billion in the middle of the month, then exceeded $17 billion at the time of writing. In lending activity through Coinbase, Morpho reported that outstanding variable-rate loans exceeded $1.4 billion when Coinbase's fixed-rate product was announced. Collateral backing those loans amounted to about $3 billion. Morpho had said in its earlier April update that Coinbase's crypto-backed loans exceeded $130 million, against collateral of more than $270 million.