Coinbase has introduced fixed-rate bitcoin-backed loans through Morpho Midnight, giving users the ability to borrow USDC while retaining their Bitcoin as collateral. Borrowers can secure both the interest rate and repayment date at the outset, providing greater predictability and flexibility over their debt obligations. The move adds to Coinbase’s existing offering of variable-rate loans, which are handled through Morpho Blue, and allows customers to choose between stable borrowing costs and fluctuating rates within a unified platform.
Fixed Terms Provide Certainty for Borrowers
The fixed-rate loans on Coinbase specify borrowing costs and maturity dates before a user opens a position. This feature enables customers to better plan their repayment strategies and manage interest expenses. As Coinbase explained, “With fixed-rate loans backed by Bitcoin, customers can lock in both their rate and their repayment dates before borrowing.”
The existing variable-rate loan program has seen notable growth, with more than $1.4 billion outstanding and approximately $3 billion held in collateral. The new fixed-rate product provides an additional financial tool for those who want to maintain bitcoin holdings without being exposed to interest rate volatility or forced to sell their assets for liquidity.
Coinbase enables users to keep their Bitcoin while accessing USDC loans, meeting growing demand for diversified borrowing structures and increased market transparency.
How Morpho Midnight Works
Morpho launched the Midnight protocol on Base in July, targeting onchain lending markets by offering fixed rates and defined maturity dates. Borrowers can now select loans that mature at the end of the current month or the next, with the final Friday of each month designated as the cutoff for repayment. Should a borrower fail to repay on time, lenders are entitled to claim the posted collateral.
Coinbase has not publicly disclosed the specific interest rates available through Morpho Midnight, as these rates are determined by supply and demand on an onchain order book. Lenders and borrowers post offers, and the protocol matches participants based on market conditions.
Wider Trends and Growing Onchain Credit Market
The launch of fixed-rate lending follows similar moves in the crypto sector, such as Circle’s recent introduction of bitcoin-collateralized USDC loans, also built on Morpho’s infrastructure. In addition, Hyperliquid began offering BTC-backed stablecoin loans this month, seeing $269 million borrowed on the first day of its service.
Coinbase manages the customer interface for these loans, while Morpho operates the underlying lending protocol and Base supports settlement. The development comes on the heels of Coinbase’s recent partnership with Stablecore to bring crypto custody, trading, and payment infrastructure to community banks and credit unions.
Morpho reported that Midnight currently holds about $30 million in deposits as its rollout continues, while Morpho Blue holds $5.2 billion in outstanding loans and $16 billion in total deposits. The company anticipates more integrations for structured credit and tokenized real-world asset loans, although no public timeline has been provided.
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