cirBTC Borrowing on Morpho Tops $190 Million as Arc Liquidity Tightens

$USDC borrowing against Circle’s wrapped bitcoin token, cirBTC, on Morpho’s Arc markets has reached about $190 million, more than 13 times the $14.3 million recorded when Circle Mint opened its bitcoin-backed borrowing service on Sept. 21.

The growth has consumed most of the main market’s available lending liquidity. Morpho’s market data, read on Oct. 13, showed $190.0 million borrowed against $195.0 million of supplied $USDC—about 97.4% utilization, leaving roughly $5 million unborrowed. The Defiant’s Sept. 21 report recorded $177 million supplied and 8.1% utilization.

For borrowers, that means substantially less immediately available $USDC in the pool; for suppliers, most of their capital is now lent out rather than sitting available for withdrawal. The market retains an 86% liquidation loan-to-value threshold: individual loans can become eligible for liquidation when debt exceeds that share of collateral value.

Circle introduced the Mint service for eligible institutional customers on Sept. 21. It lets them turn deposited bitcoin into cirBTC collateral and receive borrowed $USDC in their Mint balance without selling the bitcoin. Morpho supplies the lending protocol; Circle’s announcement says borrowing rates, collateral requirements and liquidity depend on the selected third-party market.

The figures describe outstanding market debt, rather than cumulative loan originations. A second Arc market with the same cirBTC collateral and $USDC loan asset held only about $15,000 of additional borrowings.

Galaxy Remains a Large Supplier

Galaxy’s $USDC vault remains a substantial source of funding. Morpho’s allocation record showed approximately $89.8 million allocated to the main cirBTC market. Its relative allocation cap permits exposure up to 100% of the vault’s assets.

The higher borrowing balance increases the dollars exposed to bitcoin-backed loans, but market utilization is not a measure of borrowers’ proximity to liquidation. The 86% threshold applies to each position’s debt relative to its collateral, not to the percentage of the lending pool that has been borrowed.

Circle’s separate reserve dashboard, dated Oct. 12, reported 6,164.96 cirBTC outstanding: 5,318.28 on Arc and 846.68 on Ethereum.