Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.
New Markets Drive Morpho Borrowing to $5.5bn
Borrowing on Morpho has been steadily growing since June, rising from around $3.5bn to $5.5bn by the start of October, which is an increase of 58% in four months.
A large part of this $2bn growth has been concentrated in just four markets, which together added around $1.2bn in borrowing, accounting for circa 60% of the total increase.
Three of those four markets did not yet exist in June, so a big part of the growth is coming from completely new borrowing demand. The exception is cbBTC/USDC on Base, which was and still is Morpho’s single largest market.
Higher BTC Prices Bring More Borrowing
BTC price has been increasing over the past month, so we looked at the effect this has had on borrowing in BTC-backed markets on Morpho.
As mentioned above, borrowing on Morpho has already been growing over the past few months. When we compare daily borrowing activity with changes in BTC price, we can see a positive correlation. On days when BTC rises by more than 3%, around 1.8x as many users borrow compared with a flat BTC day.
Interestingly, when we look at how much users are actually borrowing relative to their collateral, LTV shows an inverse relationship with BTC price. As BTC moved from below $65k to above $80k, average LTV fell from around 56% to 47%, meaning the value of the BTC collateral increased faster than the amount borrowed against it.
Overall, the data suggests that higher BTC prices bring more borrowers into the market, while average LTV still falls as collateral values increase faster than debt. This can also create an opportunity for lenders, as stronger BTC periods may bring higher borrowing demand and utilisation into BTC-backed markets, which can push lender yields higher.
Steakhouse Launches First Sterling Credit Market on Kamino Solana
Steakhouse brought the first sterling-denominated credit market to Kamino, letting users borrow GBP liquidity against crypto collateral without selling against dollar backed stablecoins and swapping to their preferred currency, or going through traditional FX rails.
The market enables a cross-currency trade between sterling and dollars, with tGBP borrowable against USDC, cbBTC or JitoSOL, while tGBP depositors can borrow USDC against their sterling collateral. tGBP currently costs 3.5% to borrow, compared with just 1.01% for USDC, while tGBP suppliers earn 2.84% and JitoSOL 4.85%.
Demand is still concentrated in tGBP, with around $62k borrowed against $68k supplied. Around $55k of USDC is supplied with almost nothing borrowed, which keeps USDC borrowing so cheap.