10.5% APR to Borrow USDC Against Bitcoin Looks Expensive

You ask whether a 10.5% interest rate to borrow USDC using BTC as collateral is reasonable. In my view, 10.5% APR is relatively high for stablecoin borrowing and usually signals elevated demand or platform-specific risk.

Important factors are the loan-to-value (LTV) you accept, the liquidation threshold, whether the rate is variable or fixed, and any extra fees. High LTV plus BTC volatility can make a 10.5% loan costly due to liquidation risk and potential margin calls.

If you don’t need the USDC urgently, shop around for lower rates on centralized exchanges or DeFi lenders, or lower your LTV and shorten the loan term to reduce overall risk and cost.