Coinbase has surpassed $1 billion in on-chain Bitcoin-backed loan originations eight months after launching the product in January 2025, and CEO Brian Armstrong has set a $100 billion lifetime originations target..
The run rate implied by the first eight months is roughly $125 million per month, which frames the pace required to reach the new objective.
The loans post Bitcoin collateral on the chain via Coinbase-wrapped Bitcoin, cbBTC, which is then routed to a Morpho market on Base. Utilization sets a variable interest rate every block, and USDC is delivered to a borrower’s Coinbase account.
Liquidation occurs if the loan-to-value ratio reaches 86 percent, repayment has no fixed schedule, and Coinbase lists a 4.38 percent liquidation penalty in customer materials.
According to Coinbase documentation, borrowers must maintain over-collateralization at all times, with U.S. availability that excludes New York for now.
Per Coinbase, cbBTC is backed 1:1 by Bitcoin under custody with public proof-of-reserves and canonical addresses published.
Scale on the back end matters because origination capacity depends on dollar liquidity and throughput. Total deposits rose into the low teens in billions over the summer, and Morpho posts show Coinbase-connected collateral passing $1 billion with several hundred million in active loans during mid-year.
According to DefiLlama, daily transactions and active addresses remain elevated with a double-digit-billion bridged TVL, which supports reliable liquidation execution and faster recycling of collateral into fresh originations.
Macro credit context has turned favorable for asset-backed structures. Decentralized lending outstanding reached $26.47 billion in the second quarter of 2025, up 42 percent quarter over quarter, while combined DeFi, CeFi, and tokenized credit climbed further. Outside crypto, private credit managers continue to add asset-based finance capacity.
KKR closed a $6.5 billion raise for asset-based finance this year, illustrating broader demand for secured credit instruments that can coexist with on-chain collateral rails.
Forward math sets expectations for Coinbase’s $100 billion target.
If originations average $125 million per month from the initial period, the goal requires compounding rather than linear extension. CryptoSlate calculations show that reaching $100 billion by 2030 would require about 7.7 percent compounded monthly growth from today’s base, while an arrival in 2029 would require roughly 9.6 percent per month.
Hitting the milestone by 2027 would require about 21.2 percent per month, which would depend on a larger dollar supply in Morpho markets on Base and higher per-loan tickets as Coinbase moves up-market.
The number of lifetime loans needed falls materially as the average ticket size rises, which ties the path to capacity on both the collateral and USDC sides of the book.
| Target year | Months to target | Required m/m growth | Implied CAGR |
|---|---|---|---|
| 2027 | ~24 | ~21.2% | ~900% |
| 2029 | ~50 | ~9.6% | ~212% |
| 2030 | ~62 | ~7.7% | ~144% |
Risk is concentrated in the collateral price path and liquidity at the moment of utilization spikes. The liquidation rule at 86 percent LTV implies distinct drawdown thresholds as starting leverage rises.
A cohort that enters at conservative ratios has larger buffers, while higher LTV borrowers face tighter bands during rapid price moves and gas price spikes.
According to Coinbase documentation, liquidation applies automatically on chain, and penalties apply at execution, which can amplify realized losses for borrowers who delay deleveraging in a drawdown.
| Start LTV | BTC drawdown to reach 86% LTV |
|---|---|
| 30% | ~65% |
| 35% | ~59% |
| 40% | ~53.5% |
| 50% | ~41.9% |
Rate sensitivity is a second lever.
Because Morpho markets set borrowing costs at the block level based on utilization, a sudden increase in USDC demand can lift the effective rate, which matters for larger tickets and multi-month balances where borrowers expect stability.
According to Morpho, governance and incentive changes have been used to grow USDC supply and rebalance utilization, which is a practical prerequisite for raising single-loan limits toward the levels sought by high-net-worth users.
The distribution model aligns traditional account primitives with permissionless settlement. Borrowers initiate and manage positions with familiar security and reporting, while actual lending, collateralization, and liquidations occur in an open market on Base.
Per Morpho, this front-end and back-end split, sometimes called the DeFi mullet, has supported partner-led inflows without requiring users to operate new wallets or navigate complex pool selection.
The larger market backdrop still carries lessons from 2022, when maturity mismatches and collateral concentration stressed centralized lenders. Structural differences apply here, including on-chain collateral handling and programmatic liquidation, yet dollar liquidity during stress events remains a central variable.
Tracking Base activity, bridged TVL, and Morpho market utilization provides real-time context for origination capacity and liquidation execution costs in both calm and stressed conditions.
The mechanics to support that shift are live today, and the next phase turns on how quickly dollar liquidity and borrower mix can scale on chain.
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