- Coinbase’s Bitcoin-backed loans on the Base network offer up to $100K in USDC, eliminating asset sales and hefty tax implications.
- Morpho’s partnership with Coinbase boosted its token by 40%, hitting $4.11, with $222M trading volumes and $6.06B TVL.
On January 16, Coinbase introduced Bitcoin-backed loans in the United States, leveraging the Morpho lending platform on its Base network. This innovation simplifies access for users by integrating Morpho’s borrowing features directly into Coinbase’s interface.
Bitcoin-backed loans are here.
Borrow USDC against bitcoin, without selling it. Rolling out to US users (ex. NY) starting now. More collateral assets and regions to come. Powered by @MorphoLabs and built on @Base.
The future of finance is onchain.
Learn more:… pic.twitter.com/PoLdWLz6aV
— Coinbase
(@coinbase) January 16, 2025
Max Branzburg, Head of Consumer Products at Coinbase, highlighted the company’s on-chain strategy and its goal of attracting millions of users with substantial financial assets.
“This is a moment where we’re planting a flag that Coinbase is coming on-chain, and we’re bringing millions of users with their billions of dollars,” said Max Branzburg.
Access $100K in USDC — No Asset Sale Needed
Bitcoin-backed loans allow users to access capital without selling their assets, a major advantage for those wanting to maintain their holdings and avoid hefty tax bills. Borrowers can secure loans up to $100,000 in USDC, provided they post adequate collateral in Bitcoin.
The loans require a minimum collateral ratio of 133%. If the loan’s balance reaches 86% of the collateral’s market value, the collateral is liquidated, triggering repayment and penalty fees. Interest rates are set dynamically by Morpho, adjusting every few seconds based on market conditions.
Coinbase’s app enhances the user experience by issuing alerts if the loan-to-value ratio approaches critical levels. Borrowers also benefit from no fixed payments or due dates, provided their loan-to-value ratio stays within limits.
Apart from Coinbase, Bybit also launched the Fixed Rate Loan service on 6 January. As CNF reported earlier, another large broker, Cantor Fitzgerald, is also planning to launch the Bitcoin-backed lending program with the help of Tether.
Bitcoin-Backed Loans Set to Skyrocket to $45B by 2030
Borrowing against assets isn’t a new concept—it has been a cornerstone of wealth management for generations. The “borrow, borrow, die” strategy allows individuals to take perpetual loans against their assets. For crypto traders, these loans open doors to liquidity without forcing them to sell their holdings.
With Bitcoin’s value rising, the market for such loans is set for a massive boom. Bitcoin-backed loans are projected to grow from $8.5 billion in 2024 to $45 billion by 2030. Early Bitcoin holders, sitting on substantial wealth, are likely to drive this demand.
Under the hood, Coinbase’s integration with Morpho fuels its broader strategy. Users mint Coinbase’s wrapped Bitcoin (cbBTC) and borrow Coinbase’s stablecoin (USDC) on Base, Coinbase’s Layer 2 network. This ecosystem enhances user activity and positions Coinbase at the forefront of on-chain financial services.
Morpho Surges 45% — Hits New ATH of $4.11
The introduction of these loans has had a ripple effect on Morpho’s ecosystem. The platform’s native token, MORPHO, soared 45% to an all-time high of $4.11 on January 17, 2025, following the partnership announcement. Trading volumes hit $225 million, reflecting a 180% surge in investor activity.
Morpho’s total value locked (TVL) now stands at $6.06 billion, according to DefiLlama, marking significant growth on Ethereum layer-2 networks, according to DefiLlama. The platform supports diverse use cases, including credit cards and savings products, and integrates with protocols like Moonwell and Centrifuge.
