Coinbase in the U.S. is offering Bitcoin-backed loans again, allowing users to use their Bitcoin as collateral to borrow money. This service is not open to residents of New York and gives U.S. account holders the ability to access up to $100,000 in USD Coin (USDC).
Coinbase has teamed up with Morpho Labs, a decentralized finance platform, to simplify the borrowing procedure on Base, which is Coinbase’s layer president of Coinbase, emphasized the company’s commitment to promoting “financial independence,” emphasizing that this offering enables users to make the most of their Bitcoin investments.
A representative from Coinbase explained that although the platform allows access to the loan market, it does not originate the loans directly. Customers can benefit from attractive interest rates, versatile repayment choices, and no charges or credit assessments through Coinbase.
Coinbase is making a new effort in Bitcoin lending after ending its earlier Borrow program in November 2023. The previous program provided cash loans secured by Bitcoin.
By leveraging their Bitcoin holdings, individuals can tap into funds without liquidating their assets, thereby minimizing potential tax liabilities. A long-standing strategy employed by high-net-worth individuals, known as “borrow, borrow, die,” involves using loans secured by assets to preserve wealth. The growing popularity of Bitcoin-backed loans, fueled by the cryptocurrency’s increasing value, suggests a promising outlook for market expansion.
Forecast by HFT Market Intelligence predicts that the Bitcoin-backed loan market will experience rapid expansion, increasing from $8.5 billion in 2024 to a staggering $45 billion by 2030. This anticipated growth is drawing the attention of established financial institutions, which are increasingly entering the cryptocurrency lending space. The re-entry of Coinbase into this market is a testament and digital assets, indicating a move towards more innovative and decentralized financial options for those investing in cryptocurrencies.
