Coinbase Rolls Out ETH-Backed Loans Amid Surging Market Volatility

Coinbase just handed crypto hodlers a lifeline—and a gamble—as markets churn. The exchange now lets users collateralize Ethereum for cash loans, no credit check required. Just lock up your ETH and borrow against it while the crypto rollercoaster does its thing.

Why now? Volatility’s back with a vengeance. Traders are scrambling for liquidity without dumping bags, and Coinbase smells opportunity. ‘Bank the unbanked,’ but make it predatory lending with extra steps.

Risks? Oh, just the usual: liquidations if ETH tanks, interest rates that’d make a payday lender blush, and the cold reality that you’re playing hot potato with a leveraged bet. But hey—at least it’s not a Celsius-style ‘yield’ trap. Progress?

One thing’s certain: Wall Street’s playbook—borrow against assets, rinse, repeat—just went full DeFi. Whether that ends in Lambos or tears depends entirely on which way the crypto winds blow next.

Key highlights

• Coinbase launches ETH-backed loans, letting U.S. users (excluding New York State) borrow USDC without selling Ethereum.
• Loans run on Morpho’s on-chain lending protocol and offer flexible, no-schedule repayment.
• The rollout aligns with Coinbase’s global expansion as ETH trades below $3K.

Coinbase has launched ethereum (ETH)-backed loans, giving U.S. customers, excluding New York, the ability to borrow USDC without selling their ETH. The rollout, announced Nov. 20, extends Coinbase’s new crypto-collateral lending product, which previously supported only Bitcoin (BTC).

Users can now borrow up to $1 million in USDC against ETH and up to $5 million against BTC, with no fixed repayment schedule. According to the report, loans are powered by Morpho, an open-source lending protocol on Base, and are disbursed within seconds.

Growing trend of ETH-backed loans

Borrowing against ETH allows holders to access liquidity during volatile markets without triggering a taxable sale or losing exposure to the asset. It follows a trend across DeFi where Ethereum is increasingly treated as a productive asset rather than a passive investment.

If you believe in somΞTHing, this one's for you.

ETH-backed loans are here.

You can borrow USDC against your Ethereum, unlocking liquidity without selling.

Available now in the U.S. (ex. NY). pic.twitter.com/eOvJ2BWPfr

Coinbase automatically converts pledged ETH into Coinbase Wrapped Staked ETH (cbETH) equivalents before transferring it to Morpho’s smart contracts. Interest rates update dynamically every block, and users can repay at any time. Liquidations occur only if loan amounts approach collateral thresholds.

Coinbase’s expansion

The launch follows Coinbase’s recent expansion of DEX trading in Brazil, reinforcing the exchange’s pivot toward global on-chain infrastructure. The company plans to extend DEX access to more networks, including Solana, and additional international markets.

The move signals Coinbase’s strategy to blend centralized reliability with Base-powered on-chain services, from DEX aggregation to Wrapped Bitcoin (cbBTC) and now crypto-secured lending.

ETH under pressure as loans go live

The timing aligns with a shaky market. Ethereum is trading around $2,885, facing selling pressure as Bitcoin struggles below $87,000. More than $1 trillion has evaporated from crypto markets over the past six weeks, driven by tech-sector weakness and concerns over U.S. rate policy.

Despite the downturn, Ethereum has shown relative resilience compared with Bitcoin, with analysts pointing to “smart money” liquidity zones that could support a recovery. 

Next steps

Coinbase has indicated its plans to expand crypto-backed loans to more countries in 2026. With on-chain credit markets expanding and Ethereum’s role in DeFi deepening, crypto-collateral lending is expected to grow, even as ETH navigates one of its most volatile periods of the year.

Also read: Coinbase Taps Kalshi to Build Regulated Prediction Market