October 13th 2026, 6:46 PM
USDC Liquidity Dries Up as CirBTC Borrowing Surges to $190M
Key Summary
Circle's cirBTC borrowing on Morpho has reached $190 million, with USDC liquidity dwindling, as institutional clients tap into the DeFi protocol to borrow against Bitcoin without selling it. The utilization of the lending pool has jumped from 8.1% to 97.4% in just three weeks, indicating strong demand and limited supply. The move highlights the growing popularity of DeFi lending and the increasing reliance on stablecoins like USDC.
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Introduction
Circle launched cirBTC on September 21 as a token backed 1:1 by Bitcoin, built for Digital Asset-Backed Borrowing, or DABB. The lending protocol allows eligible institutional Circle Mint customers to post cirBTC as collateral and borrow USDC that lands directly in their Mint balances. The lending runs through Morpho markets on both Arc and Ethereum.Utilization Measures
About 97.4% of the USDC supplied to the main cirBTC/USDC market on Morpho is now borrowed. When Circle Mint opened access on September 21, that figure was 8.1%. Three weeks later, the room is almost full.Risks and Challenges
The squeeze is not limited to the headline market either. Smaller individual cirBTC/USDC markets on Arc have also reported utilization close to 100%. The risks are the usual ones, magnified by concentration. An 86% LLTV leaves room, but a sharp Bitcoin drawdown could push some positions toward liquidation.Impact on Institutional Bitcoin and DeFi
For Circle, the product gives Bitcoin holders a reason to bring assets into its ecosystem and creates fresh demand for USDC itself. Every dollar borrowed in these markets is a dollar of USDC in circulation. It also gives Arc, Circle's own Layer-1, a concrete use case early in its life.Conclusion
The utilization measures how much of a lending pool is actually out the door. The move from 8.1% to 97.4% in about three weeks tells you demand ran far ahead of supply. Borrowers showed up faster than lenders did.Key Entities
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#Bitcoin#USDC#DeFi#Morpho