Coinbase, a leading cryptocurrency exchange, announced the full rollout of Bitcoin-backed loans to all U.S. users except those in New York on April 30, 2025, enabling customers to borrow up to $1 million in USDC, a stablecoin pegged to the U.S. dollar, without selling their Bitcoin. This move marks a significant step in bridging traditional finance with the growing crypto market, targeting Bitcoin holders who need liquidity.
The service, initially teased in early 2025, allows users to instantly access funds by pledging Bitcoin as collateral, which is converted to cbBTC and managed through Morpho, an open-source lending protocol on the Base blockchain.
Coinbase reported that $100 million in USDC was borrowed in less than 100 days since the program’s soft launch, showing strong demand. Interest rates start at 5%, which Coinbase says is twice as competitive as other crypto-backed loan options, with no hidden fees.
“Bitcoin-backed loans provide a valuable solution for our users to access funds for significant expenses, such as purchasing a car or managing unexpected costs, without needing to sell their Bitcoin,” according to a Coinbase Blog post on April 30, 2025. The company also highlighted the tax benefits of borrowing against Bitcoin instead of selling it, as selling could trigger taxable events.
New York’s exclusion stems from the state’s strict BitLicense regulations, established in 2015 by the New York State Department of Financial Services. According to a 2021 report by Capital Fund Law Group, the BitLicense has driven many crypto firms out of New York due to high compliance costs and legal hurdles. X user Matthew Baldassano commented, “Got to get NY on board!!”
The global Bitcoin-backed lending market is growing rapidly. A February 2025 report by Osler, Hoskin & Harcourt LLP stated that the market reached $8.5 billion in outstanding loans by August 2024 and is projected to hit $45 billion by 2030. Traditional financial institutions like Goldman Sachs and Morgan Stanley have also shown confidence in Bitcoin, collectively investing $600 million in spot Bitcoin ETFs by mid-2024, according to the same report.
Bitcoin-backed loans are now fully rolled out to all US users (ex. NY). You can instantly borrow up to $1M in USDC on Coinbase. ↓ pic.twitter.com/zvZkxSaKHO
— Coinbase 🛡️ (@coinbase) April 30, 2025Source: Coinbase/X
Reactions on X were mostly positive, with user Crystal Blaq predicting, “$BTC at 100k soon,” and Crypto Life calling the development “bullish!” However, some users, like Kevin Finnerty, used the opportunity to pitch alternative cryptocurrencies, asking, “Wen $KENDU listing??”
Looking ahead, Coinbase’s move could set a precedent for other exchanges to expand crypto-backed financial services, potentially reshaping how Bitcoin holders manage liquidity. Industry experts expect further regulatory clarity, especially in states like New York, which could unlock additional markets. Dr. Layman Beard, an X user, raised a key question: “When are we bringing crypto insurance to Coinbase?”—pointing to the next potential frontier for crypto financial products.
As the cryptocurrency landscape evolves, Coinbase’s Bitcoin-backed loan program highlights the growing integration of digital assets into everyday finance, offering users flexibility while navigating a complex regulatory environment. Whether this sparks broader adoption remains to be seen, but the momentum is clear.
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