Coinbase Launches Bitcoin-Backed Lending Feature, Excluding New York

Coinbase's Bitcoin-backed lending feature is now available to eligible users across the United States, excluding New York.

The exchange made the announcement on April 30 via X post, confirming that customers can borrow up to $1 million in USDC against their Bitcoin holdings.

The platform aims to offer a flexible solution for both planned and unexpected expenses, allowing users to access liquidity without selling their Bitcoin.

Bitcoin-backed loans are now fully rolled out to all US users (ex. NY). You can instantly borrow up to $1M in USDC on Coinbase. ↓ pic.twitter.com/zvZkxSaKHO

— Coinbase 🛡️ (@coinbase) April 30, 2025

Flexible Terms and Instant Access

According to Coinbase, the product allows users to unlock the value of their Bitcoin holdings while avoiding taxable events.

Upon initiating a loan, the customer’s Bitcoin is immediately converted into cbBTC, Coinbase’s wrapped version of BTC, which is later deposited into Morpho.

Morpho is a decentralized lending protocol deployed on Base, Coinbase’s Ethereum layer-2 network. The requested funds are then released in USDC, providing nearly instant access to capital.

Customers can borrow up to $1 million without fixed repayment schedules, and loan terms remain open-ended. The company added that rates could be as low as 5%.

Since launch, customer demand has resulted in over $100 million in USDC borrowed within the first 100 days.

While the current rollout targets U.S. customers outside New York, Coinbase confirmed that it plans to expand the Bitcoin-backed loan offering to international markets.

Bitcoin Yield Fund for Institutions

In parallel with its loan expansion, Coinbase Asset Management is also debuting a new Bitcoin Yield Fund, designed for non-U.S. institutional investors. The fund officially launches on May 1 and aims to generate annualized net returns of 4% to 8%, payable in Bitcoin.

Unlike staking mechanisms used in Ethereum or Solana, the fund will rely on a cash-and-carry trading strategy. This approach takes advantage of pricing gaps between spot Bitcoin and perpetual futures contracts.

This yield opportunity may increase further during periods of surging Bitcoin prices. However, Coinbase noted that returns could decrease—or even become negative—during periods of decreasing Bitcoin prices.

Investors will need to deposit Bitcoin to participate and can withdraw their holdings monthly. Both Coinbase and other qualified custodians will hold the assets, and the fund will offer a passive way to generate Bitcoin-denominated returns.