Coinbase are now offering loans for US base customers

[Yaunfitda]

According to their site:

Coming soon!
Borrow cash using Bitcoin as collateral
Now you can borrow up to $20,000 from Coinbase using your Bitcoin as collateral. Pay just 8% APR with no credit check.

This offer is currently available to residents of the following US states: AK, AR, CT, FL, GA, IL, MA, NH, NJ, NC, OR, TX, VA, NE, UT, WI, and WY.

https://www.coinbase.com/borrow

What do you think of this offer? it will be interesting to hear about US traders here as I'm obviously not from the state.

If ever you wanted to borrow, are you going to reinvest it to crypto?

[TryNinja]

8% is too high. There are competitors like Celsius, Nexo and Blockfi that charge as low as 1% interest (Celsius) or even lower if you use their coin to pay the loan. Nothing new to see here.

[LeGaulois]

8% is too high. There are competitors like Celsius, Nexo and Blockfi that charge as low as 1% interest (Celsius) or even lower if you use their coin to pay the loan. Nothing new to see here.

I checked BlockFi and it has a 4.5% interest rate (up to 9.5%) and Nexo starts at 5.9%. I would say Coinbase and its 8% is in the average (?)
It's also the average rate of 'revolving credits' (you know, the ones you can get quickly on the web or even at the supermarket).

The thing with coinbase is they have more weight that Nexo & co. don't have. They definitely have a piece of the cake to take

... it will be interesting to hear about US traders here as ...

Traders do not borrow money 'to gamble' with it, It's a completely irresponsible thing to do.

[The Sceptical Chymist]

What do you think of this offer?

Eh, the interest rate isn't astronomical, but I'm not sure how much lending business Coinbase is going to get, as people who own crypto presumably have cash as well--unless they overinvested in crypto, which bitcoin investors have been known to do. 

Borrowers are going to seriously have to worry about margin calls to put up more collateral for their loans if bitcoin drops, and that's a serious concern.  But in any case, I don't have a problem with Coinbase breaking out into the lending biz.  At least they're regulated and relatively reputable, and it's better than trying to get a loan on the forum (lol). 

8% is too high. There are competitors like Celsius, Nexo and Blockfi that charge as low as 1% interest (Celsius) or even lower if you use their coin to pay the loan. Nothing new to see here.

It is high, but not that high, and I'm sure some US citizens would prefer to use a service like Coinbase than one they're not as familiar with.  Anyway, it'll be interesting to see if this catches on and whether Coinbase will still be offering this service in 1-2 years.

[Hamphser]

The thing with coinbase is they have more weight that Nexo & co. don't have. They definitely have a piece of the cake to take

Thats why they do end up on having that 8% because they do know that they are much more better compared to those who are already existed but actually it isnt really that exaggeratedly high and still considerable
and the fact that i can somewhat trust up Coinbase than others.

[btc_angela]

8%? WTF are Coinbase thinking? I wouldn't bother to make a loan though, money grabbing and taking advantage of those noobs who think that making a loan is a good choice to play around the market. They can simply get REKT.

If I'm a US base customers, I would stay away from it, there's a better options out there.

[Kemarit]

8%? WTF are Coinbase thinking? I wouldn't bother to make a loan though, money grabbing and taking advantage of those noobs who think that making a loan is a good choice to play around the market. They can simply get REKT.

Obviously, this is a trap for noobs in crypto sphere. No difference with those credit card loan, it will just sink you deeper.

It is really unwise to bite on this offer from Coinbase, plus remember there is a collateral here. And remember just like any loans, there is risk, as you are giving them the right to seize your precious BTC if you haven't paid. Not a good idea, IMHO.

[sheenshane]

No can beat celsius network, they had 1% Loan Program. It might borrowers always refer to the lowest APR  than the highest one. If you will grab high offer it might a big REKT on your side as a borrower. But this a good news if you are in the state, probably if there is no other lending company to barrow, Coinsbase is the best alternate.

If ever you wanted to borrow, are you going to reinvest it to crypto?

Borrow crypto and reinvest to crypto? I don't think it is a good idea unless if you are preferring to stable coin and then reinvest to high volatile coins like Bitcoin or Ethereum and waiting to becomes bullish, sounds like you are wasting money paying the interest per month if there's no bullish trend. Risky tho, IMO.

[figmentofmyass]

What do you think of this offer?

Eh, the interest rate isn't astronomical, but I'm not sure how much lending business Coinbase is going to get, as people who own crypto presumably have cash as well--unless they overinvested in crypto, which bitcoin investors have been known to do. 

Borrowers are going to seriously have to worry about margin calls to put up more collateral for their loans if bitcoin drops, and that's a serious concern.

you can only borrow up to 30% of the collateral in cash. that's 0.3x leverage. the risk of margin call should be relatively low. even if you maxed out your leverage, bought the top, and then we had another march 2020 crash, you should be okay.

it's an interesting idea---to invest in crypto, then put it up as collateral and pull cash back out, all while retaining your investment exposure and not triggering taxation. assuming bitcoin outperforms the interest rate (easy in a bull market) and you can pay back your loan, then it makes sense.

[2xHR]

How can people use this shitty exchange that combines high fees, KYC and many other shitty stuff?

[hugeblack]

Coming soon!
Borrow cash using Bitcoin as collateral
Now you can borrow up to $20,000 from Coinbase using your Bitcoin as collateral. Pay just 8% APR with no credit check.

If it is possible to sell/pay BTC if its value rises, then it will be a good choice, as people can choose between selling their currencies or paying the amount and getting the money back.
How will the collateral be released if the value rises or collapses severely?
8% looks like a high rate, but the BTC’s position as collateral looks appropriate as you are betting on an asset that will rise in the future.

[Lucius]

How can people use this shitty exchange that combines high fees, KYC and many other shitty stuff?

Coinbase has positioned itself as one of the biggest players in the crypto world, and no matter how many complain about this or that, the fact is that (if they are telling the truth) they store about 1 million of all mined BTCs so far. And as we can see they are constantly developing their business because it is the only way to stay on top, and except maybe Binance, they have no serious competitor on the world level.

Maybe this is just a response to what blockchain.com offered some time ago - although of course there is a difference between the two services - but it is crucial that in both cases users coins remain in the company's possession - which again brings us to the issue of real ownership and private key controls.

[figmentofmyass]

How can people use this shitty exchange that combines high fees, KYC and many other shitty stuff?

traders need liquidity. coinbase is arguably the most liquid spot exchange.

bitfinex is highly liquid too, but many people don't view them as a legitimate company and are paranoid about the safety of deposited funds. coinbase comes with money transmitter licenses, FDIC insurance and even crypto insurance on their hot wallets, a well known CEO, etc so people feel comfortable with them.

they also have stuff like "coinbase earn" which reels in small casual investors, they offer staking rewards and interest payments on USDC.....this stuff has appeal for some people. now they're offering low leverage loans too.

personally i hate coinbase, but i did KYC there several years ago and don't intend to do it anywhere else, so i still occasionally use them. because their trading fees are so high now, i usually trade BTC against stablecoins on altcoin exchanges like binance and kucoin, then i withdraw USDC to coinbase, which i can convert to USD and withdraw for free. that cuts down on all the fees.

[countryfree]

It's a nice idea to grow their business, but I don't like the idea of my coins being blocked by an exchange since they're collateral.
Besides, as many people have already pointed, interest rate is way too high. It can only appeal to people who couldn't get a loan from a real bank.

[TryNinja]

It's a nice idea to grow their business, but I don't like the idea of my coins being blocked by an exchange since they're collateral.
Besides, as many people have already pointed, interest rate is way too high. It can only appeal to people who couldn't get a loan from a real bank.

I mean, when I complained about rates it was because there are many competitiors in the same ecossystem (cryptocurrencies) that charge less (e.g Celsius with 1%). But it is still good when you compare it with the banks of many countries or the rates charged by the credit cards processors.

If you prefer paying 7%+ because it's "Coinbase" vs a smaller starting company, then go for it. But still don't go for the banks.

[figmentofmyass]

It's a nice idea to grow their business, but I don't like the idea of my coins being blocked by an exchange since they're collateral.
Besides, as many people have already pointed, interest rate is way too high. It can only appeal to people who couldn't get a loan from a real bank.

I mean, when I complained about rates it was because there are many competitiors in the same ecossystem (cryptocurrencies) that charge less (e.g Celsius with 1%). But it is still good when you compare it with the banks of many countries or the rates charged by the credit cards processors.

If you prefer paying 7%+ because it's "Coinbase" vs a smaller starting company, then go for it. But still don't go for the banks.

people will, for the same reason coinbase can charge drastically higher trading fees than everyone else. they have a highly trusted brand and a model that normies can wrap their head around.

celsius is custodial but also can't keep most deposited coins in cold storage. not only that, but unlike coinbase, their hot wallets are not insured.

so not only is there the branding/trust issue, but your coins are theoretically more secure in coinbase's custody. it shouldn't come as a surprise that you need to pay a premium to borrow there.

[Mr.Scott]

How can people use this shitty exchange that combines high fees, KYC and many other shitty stuff?

I totally agree with you, recently my coinbase account has been locked since i'm unwilling to complete the verifications. Coinbase exchange is the worst wallet ever what i think. It is so expensive to move between coins, that's why i prefer others except coinbase.