Ledger Activates Bitcoin-Backed Crypto Loans in Ledger Live, Powered by Morpho

Ledger has switched on a new borrowing feature, Crypto Loan, inside its companion app, Ledger Live, and the engine underneath is the DeFi lending protocol Morpho. The rollout was confirmed on Thursday, October 22, in Morpho's official announcement, and the wallet maker's own October update also references the addition.

Borrowing Against Bitcoin From Cold Storage

The new feature allows users to pledge bitcoin as collateral and borrow against it directly from Ledger Live. Because Ledger hardware wallets keep private keys offline, the collateral remains secured by the device itself, with the lending activity executed through the integrated Morpho protocol rather than through a custodial intermediary. That distinction matters in practice: borrowing against crypto has typically required depositing assets with a centralized platform, where the lender takes control of the coins, whereas here the keys to the pledged bitcoin never leave the user's hardware device.

Ledger and Ledger Live

Founded in Paris in 2014, Ledger is one of the best-known makers of hardware wallets, devices that store the private keys controlling crypto holdings offline and away from internet-connected computers. Ledger Live, its companion application, serves as the hub for managing supported assets and has progressively added services beyond storage, including buying, swapping and staking. With Crypto Loan, that expansion now reaches borrowing, extending the app's role from managing and growing holdings to unlocking liquidity from them.

Morpho's Role

Morpho is a decentralized, non-custodial lending protocol. It began as an optimizer that improved interest rates on the established money markets Aave and Compound, and later introduced Morpho Blue in 2024, a permissionless base layer in which each lending market is defined by a single collateral asset, a single loan asset and a fixed set of risk parameters. Ledger Live first integrated Morpho in 2023 to offer earn features on selected assets, making the new Crypto Loan function a deepening of an existing collaboration between the two teams. Under this architecture, the conditions of a loan are set by the parameters of the specific market being used, which is how lending can operate without a company standing between the user and the collateral.

Bitcoin-Backed Lending in Context

Borrowing against bitcoin lets holders access liquidity without selling their coins, a model offered by both centralized platforms and on-chain protocols such as Morpho. The category drew heightened scrutiny in 2022, when several large centralized crypto lenders entered bankruptcy, underscoring the counterparty risk involved when deposited collateral is held by a company. With the Crypto Loan rollout, that capability now sits inside the interface of one of the most widely used hardware wallet ecosystems, in a non-custodial setup where a protocol rather than a corporate balance sheet administers the collateral.

This article was first published on COINOTAG: https://en.coinotag.com/ledger-crypto-loan-morpho-bitcoin-collateral