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      Spark Allocates Over $400 Million USDC to Morpho's Bitcoin-Backed Lending Market

      Spark has supplied more than $400 million in USD Coin (USDC) to the cbBTC/USDC lending market on Base, representing nearly a quarter of the total USDC in this market. This lending market, which operates on the Morpho platform, has seen significant activity, with total supplied assets reaching approximately $1.77 billion and a borrowing figure of around $1.60 billion, resulting in a utilization rate exceeding 90%.

      The cbBTC/USDC market, which launched on September 4, 2024, allows users to borrow USDC against their Bitcoin collateral. Spark's allocation layer, part of the Sky ecosystem, routes its capital through a dedicated Morpho USDC Vault, which feeds directly into this lending market. As competition for lending has increased, supply annual percentage yields (APY) have decreased from around 7.5% to approximately 4.73%, while borrowers currently pay about 5.26%.

      Coinbase, a major cryptocurrency exchange, introduced Bitcoin-backed loans in January 2025, enabling users to borrow USDC against their cbBTC directly within its app. Spark is identified as a primary liquidity provider for this lending service, indicating that a significant portion of the USDC borrowed by Coinbase users likely originates from Spark's vault. The market has also experienced a 55% increase in volumes year-to-date, highlighting its growing popularity among lenders and borrowers alike.

      The lending market operates with an 86% liquidation loan-to-value ratio, meaning that if a borrower's debt reaches 86% of their collateral's value, their position may be liquidated. This structure allows for aggressive borrowing against Bitcoin, but it also raises concerns about potential liquidations in the event of a sharp decline in Bitcoin prices. As Spark continues to play a crucial role in this market, key metrics such as utilization rates and the spread between supply and borrow rates will be critical to monitor.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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