Ledger wants bitcoin holders to borrow without selling, and without handing their coins to a lender. On Oct. 7, at TOKEN2049 Singapore, Ledger introduced Crypto Loan, a feature in Ledger Wallet that lets eligible users pledge wrapped bitcoin and borrow stablecoins. The lending runs on Morpho, a decentralized lending protocol, with Yield.xyz handling the loan flow.
How the Ledger Crypto Loan works
According to >Ledger’s release notes and reporting by >crypto.news and >Decrypt:
| Feature | Detail |
|---|---|
| Collateral | cbBTC (Coinbase Wrapped Bitcoin) or wBTC, on Ethereum |
| Borrow | USDC or USDT |
| Lending protocol | Morpho isolated markets |
| Integration | Yield.xyz (transaction building, position monitoring) |
| Interest | Variable, based on market utilization |
| Risk | Liquidation if the loan-to-value ratio rises too far |
| Approval | Clear Signing on a Ledger hardware device |
| Availability | Gradual rollout; depends on country |
In the app, users can simulate a loan, open one, monitor the loan-to-value (LTV) ratio, add collateral, borrow more, repay, and withdraw collateral. Ledger calls itself a technology provider rather than a lender or adviser. The loans come from Morpho markets, not from Ledger’s balance sheet.
The important detail: wrapped bitcoin
Crypto Loan does not accept native BTC. You need cbBTC or wBTC, which are Ethereum tokens backed by bitcoin held by a custodian. That adds two layers of risk compared with simply holding bitcoin:
- Custodian risk. cbBTC is backed by bitcoin held by Coinbase. wBTC has its own custody arrangement. If the custodian fails, the wrapped token could lose its peg.
- Smart-contract risk. Your collateral sits in Morpho contracts on Ethereum.
Ledger’s hardware still protects the keys that sign transactions. It cannot protect against a failure inside the protocol or at the custodian.
A liquidation example
Here is a simplified illustration. Morpho markets set their own liquidation thresholds, so these numbers are only an example. Suppose you deposit 0.1 cbBTC when bitcoin is at $82,872, about $8,287 of collateral, and borrow $4,000 USDC. Your LTV is about 48%.
If the market’s liquidation threshold were 86%, your position could be liquidated if your collateral fell to about $4,650, which means bitcoin dropping roughly 44% to around $46,500. Interest accrues the whole time, so the real threshold creeps closer.
This week shows why the cushion matters. Bitcoin fell from about $87,000 to near $80,300 in a few days (our report), and more than $1 billion of leveraged positions were liquidated across the market. Borrowing well below the maximum is the main protection you have.
Why it matters
The bigger story is distribution. Morpho co-founder Paul Frambot described a “liquidity flywheel”: stablecoins deposited through Ledger Earn (also built on Morpho) can fund the loans that bitcoin holders take out through Crypto Loan. Ledger says its devices secure almost 30% of bitcoin held by retail investors. Putting DeFi borrowing behind a familiar hardware wallet could bring a lot of new users to on-chain lending.
It also fits a trend of DeFi being built into consumer apps. Coinbase has offered cbBTC loans through Morpho for some time, and Lido has just proposed its own Morpho-based lending market (our coverage).
As of 15:25 UTC on Oct. 9, CoinGecko showed bitcoin at $82,872 and MORPHO at $2.39, up 2.7% on the day.
CryptoVank’s take on the Ledger Crypto Loan
Crypto Loan is a well-designed front end on top of proven infrastructure, and hardware-signed approvals are a real safety improvement. But “self-custodial” doesn’t mean “risk-free.” You are adding wrapped-bitcoin custody risk, smart-contract risk and liquidation risk. If you use it, borrow conservatively, watch your LTV and keep spare collateral ready. For the fundamentals, read our DeFi risks guide and self-custody setup guide.
Ledger Crypto Loan FAQ
What can I borrow with Ledger Crypto Loan?
USDC or USDT, against cbBTC or wBTC on Ethereum.
Can I use native bitcoin?
No. Only wrapped bitcoin tokens (cbBTC or wBTC) are supported.
Is the interest rate fixed?
No. Rates are variable and depend on how much of the Morpho market is borrowed.
Can my bitcoin be liquidated?
Yes. If bitcoin’s price falls far enough that your loan-to-value ratio passes the market’s threshold, your collateral can be liquidated.
Sources
- >Ledger: Release Notes, Ledger Wallet (October 2026)
- >crypto.news: Ledger adds Bitcoin-backed loans through Morpho to its wallet app
- >Decrypt: Ledger Launches Bitcoin Loans
- >CoinGecko market data, Oct. 9, 2026, 15:25 UTC
This article is for information only and is not financial advice. Borrowing against crypto can result in liquidation and loss of collateral.
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