Coinbase bitcoin loans explained: how Morpho powers them
Coinbase lends USDC against bitcoin through a Morpho market on Base. Learn how the rate, LTV limits, fees, liquidation and the new fixed-rate loans work.
Updated
Since January 2025, Coinbase customers in the United States, except New York, have been able to borrow USDC against their bitcoin without selling it. Coinbase provides the app, but the loan itself is made on Morpho, on Base, the blockchain network built by Coinbase. This guide explains what happens behind the button, based on Coinbase's help pages and Morpho's documentation at the time of writing (September 2026).
How a loan works
- You choose how much USDC to borrow in the Coinbase app.
- Your bitcoin is converted one to one into cbBTC, Coinbase's wrapped bitcoin on Base, and locked as collateral in a Morpho market.
- The USDC arrives in your account within seconds. There is no credit check.
- For a variable-rate loan there is no due date and no minimum payment. You repay when you like, in part or in full, and your collateral is returned when the loan is fully repaid.
Coinbase launched the product on 16 January 2025 with a limit of 100,000 dollars, raised it to 1 million dollars on 30 April 2025, and its borrow page lists loans of up to 5 million dollars at the time of writing. Coinbase has since added other collateral, starting with ETH on 20 November 2025, and its help pages now list eleven eligible assets, most with lower limits than bitcoin. Loans are available to verified customers in the US, except New York, with limited access in the UK. Coinbase's terms say loan proceeds cannot be used for trading on Coinbase.
The Morpho market behind it
Coinbase's help pages describe an 86% liquidation level for bitcoin loans. That matches the Morpho market on Base that lends USDC against cbBTC with an 86% LLTV, by far the largest market of its kind. On-chain, that market had about 1.5 billion dollars of USDC borrowed in late September 2026, in line with the Coinbase loan total Morpho reports. Coinbase does not publish the market's identifier, and other apps and lenders use the same market, so treat this as our reading of public data.
The USDC you borrow comes from lenders in that market, mostly Morpho vaults run by curators. In September 2026, Morpho reported that Coinbase's variable-rate loans had grown to more than 1.4 billion dollars outstanding, backed by about 3 billion dollars of collateral.
The variable rate
The rate is not set by Coinbase. It comes from the market's interest rate model, which moves with utilization, the share of the market's USDC that is lent out, and aims to keep it near 90%. It can change with every block, and it drifts up for as long as the market stays more than 90% borrowed. The details are in how Morpho interest rates work. The live rate and its history are on the Coinbase bitcoin loan rate page.
Coinbase adds its own fees on top of the market rate:
- A one-time processing fee each time you borrow: 2% on the first 250,000 dollars and 1% on any amount above that. It is added to your loan, so interest is charged on it too.
- A possible platform fee, paid monthly on variable-rate loans and upfront on fixed-rate loans, shown before you borrow.
To see what a rate and fees add up to over time, try the borrow cost calculator.
LTV limits: Coinbase's rules and the market's
Your LTV, or loan-to-value, is what you owe divided by what your collateral is worth. The market's LLTV of 86% is the hard line: once your LTV passes it, the loan can be liquidated. Coinbase grades loan health against that line:
| Coinbase loan health | Share of the 86% limit | LTV |
|---|---|---|
| Good | 0% to 60% | Below 51.6% |
| Fair | 60% to 90% | 51.6% to 77.4% |
| Danger (Coinbase sends an email) | 90% to 100% | 77.4% to 86% |
| Liquidated | 100% | Above 86% |
Coinbase also stops you borrowing all the way to the line. Its help pages do not state the maximum, but The Block reported in November 2025 that bitcoin and ETH loans can be opened at up to 75% LTV. Coinbase also offers optional loan protection, which tops up your collateral once when your LTV reaches a trigger you set. Coinbase says it is not a guarantee.
A worked example: you lock up 1 bitcoin worth 100,000 USDC and borrow 50,000 USDC, an LTV of 50%. Liquidation starts when bitcoin falls to about 50,000 / 0.86 = 58,140 USDC, a drop of about 42%. Interest and fees added to the loan raise that price over time. You can run your own numbers with the liquidation price calculator.
What happens at liquidation
Coinbase does not sell your bitcoin. Once your LTV passes 86%, any liquidator on Morpho, in practice an automated bot, can repay part or all of your debt and take cbBTC collateral worth the repaid amount plus a bonus. Coinbase's help pages put the penalty at 4.38%, which matches Morpho's liquidation bonus formula for an 86% LLTV market. Anything left over stays yours. In a sharp sell-off many loans can be liquidated at once: Decrypt reported a record of about 170 million dollars of Coinbase loans liquidated in one week in early February 2026. The rules are in Morpho LLTV and liquidations explained.
Fixed-rate loans (since 22 September 2026)
On 22 September 2026 Coinbase added fixed-rate loans against bitcoin, powered by Morpho Midnight, Morpho's fixed-rate protocol. According to Coinbase's help pages and reporting by The Block:
- Term: the loan is due at the end of the current month or the end of the next month. Coinbase told The Block that "end of month" means the last Friday of the month.
- Rate: set by lenders' offers on Midnight. The app shows an indicative rate, and your final rate is fixed when you confirm. Coinbase declined to publish its rates at launch.
- Repayment: the loan must be repaid in full by maturity. Repaying early does not reduce the interest owed.
- Limits: one fixed-rate loan per collateral asset, and you cannot hold a fixed and a variable loan on the same collateral or switch a loan between the two.
- At maturity: Coinbase sends reminders 7 days, 3 days and 24 hours before. An unpaid loan becomes liquidatable even if its LTV is healthy, with a penalty that rises over a short period. You can still repay until it is actually liquidated.
How Midnight works underneath is explained in Morpho Midnight fixed-rate loans explained. Coinbase has not said whether fixed-rate loans are available in every region where variable loans are.
Risks to keep in mind
- Liquidation: bitcoin can fall 20% or more in days, and liquidation happens without a grace period.
- Rising rates: a variable rate can climb quickly when the market is heavily borrowed.
- Protocol and wallet risk: Coinbase lists smart contract vulnerabilities, protocol liquidity issues and issues with the Coinbase smart wallet used for the loan among the risks.
- Oracle risk: the market's oracle, not an exchange price, decides when a loan is liquidated.
More Coinbase data is on the Coinbase page.
Common questions
Does Coinbase lend me the USDC itself?
No. Coinbase provides the app. The USDC comes from lenders in a Morpho market on Base, and your bitcoin is held there as cbBTC collateral under Morpho's rules.
At what LTV is a Coinbase bitcoin loan liquidated?
At 86%, the LLTV of the Morpho market behind the loans. Coinbase warns you by email once your LTV passes about 77.4%, which is 90% of that limit.
How much is the Coinbase loan liquidation penalty?
Coinbase's help pages put it at 4.38% for loans with an 86% liquidation level, which matches Morpho's liquidation bonus for markets with that LLTV.
Does Coinbase charge fees on bitcoin-backed loans?
At the time of writing its help pages list a one-time processing fee of 2% on the first 250,000 dollars and 1% above that, plus a possible platform fee, on top of the market interest rate.
Can I repay a Coinbase fixed-rate loan early to save interest?
You can repay early, but Coinbase says repaying early does not reduce the interest owed. The full fixed interest is due either way.