Ledger's loan needs wrapped bitcoin, which is 1.06% of all bitcoin

Ledger launched Crypto Loan on 7 October. A holder posts collateral and borrows USDC or USDT without selling, with Yield.xyz running the credit process and Morpho supplying the lending infrastructure. The signature happens on the hardware device.

“All of this happens within the same self-custodied environment”

— Поль Фрамбо, Сооснователь Morpho

The collateral is cbBTC or wBTC

Bitcoin itself does not qualify. The collateral has to be cbBTC or wBTC, tokens on Ethereum issued against bitcoin held by Coinbase and BitGo. Getting to the loan means handing the coins to a custodian and taking back a claim.

The two wrappers hold 116,159 BTC and 96,264 BTC between them, 212,423 coins worth $17.66bn. Against roughly 19.9 million bitcoin in existence that is 1.06%. The other 98.94% cannot be used here without being converted first. Wrapping is a familiar trade and plenty of people make it on purpose, but it is a step the phrase «borrow against your bitcoin» tends to skip.

Ledger Crypto Loan launched without the numbers a borrower would use to price it. The announcement carries no interest rate, no loan-to-value ceiling, no minimum or maximum size and no liquidation threshold. Those terms are set in the Morpho markets the loan runs through, and the announcement does not say which ones.

Two layers, two different claims

Frambot's statement is accurate about the layer it describes. The wallet is self-custodied, the keys stay with the user, and the loan is approved on the device. None of that is in question.

The asset underneath is a different layer. A user who starts with bitcoin on a Ledger and ends with a loan has moved through Coinbase or BitGo on the way, and the counterparty risk sits there rather than in the wallet. The hardware covers the signature and nothing about the wrapper.

Morpho is the part with scale

Morpho Blue holds $11.23bn across 45 chains, against a combined wrapped-bitcoin float of $17.66bn. The constraint is the supply of eligible collateral.

We published a piece this afternoon on the Binance.US wallet, where self-custody means a key split three ways with the exchange holding one share. Both products shipped the same week, both use the word, and each means something specific by it. The failure modes differ too: on 1 October a $963 theft at MetaMask pulled $1.4bn out of Ethereum staking.

Informational material, not investment advice. Ledger has not published rates, loan-to-value limits or liquidation terms, and the supply figures move with the market.