cirBTC Borrowing Tops $190M on Morpho as USDC Utilization Hits 97.4%

Borrowing against cirBTC on Morpho has crossed $190 million, and the capital flooding into the protocol is consuming USDC supply at a rate that has left the main market nearly tapped out.

USdc utilization on Morpho's main market now stands at 97.4%, up from 8.1% on September 21 when Circle Mint first opened access to the market. That is an 89.3 percentage point jump in 22 days, one of the sharpest utilization moves seen on a major lending protocol in recent memory.

cirBTC is a wrapped representation of Bitcoin designed for use in DeFi lending markets. Borrowers deposit cirBTC as collateral and draw down USDC loans against it, effectively unlocking dollar liquidity from Bitcoin holdings without selling the underlying asset. The structure has proven popular with institutions looking to run carry trades or fund operations while maintaining BTC exposure.

At 97.4% utilization, the available USDC cushion on Morpho's main market is razor thin. Lending protocols are designed to handle high utilization through rate mechanics: as available liquidity shrinks, borrow rates rise automatically, which should attract new USDC depositors and bring utilization back toward equilibrium. That self-correcting loop has played out before on Aave and Compound during demand spikes, but the speed of this particular move is unusual. Most utilization surges on established protocols build over weeks or months. This one compressed a near-full cycle into three weeks.

Two explanations fit the data. Either a large cohort of institutional borrowers entered the market simultaneously following Circle Mint's September 21 access opening, or a meaningful share of USDC liquidity providers withdrew supply around the same time, tightening the denominator while demand held steady. The net effect is the same either way: borrowers looking to draw USDC against cirBTC collateral now face a market where available liquidity is close to exhausted.

The $190 million in cirBTC borrowing reflects institutions comfortable enough with Morpho's infrastructure and cirBTC's peg mechanics to put nine-figure sums to work in a DeFi lending market. A market sophisticated enough to attract that volume is also one where a liquidity crunch carries real consequences for active borrowers, particularly if rate spikes make rolling positions expensive before new USDC supply arrives.

Whether this resolves as a healthy demand signal or a short-term stress event depends on how quickly the rate incentive draws fresh deposits. At current utilization, borrow rates will be elevated, and the window for new liquidity providers to capture those rates is open. If supply responds within days, the episode becomes a footnote. If it does not, borrowers holding cirBTC positions on Morpho will be watching the available liquidity figure closely.