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US crypto exchange Coinbase is going all out with its crypto offerings ahead of a purported bull run, listing DeFi projects, in-demand altcoins, and now a product for loans using one’s Bitcoin.
The exchange announced Thursday that Coinbase users can burrow cash loans on up to 30% of their Bitcoin holding. The feature will be gradually rolled out to cover all US states, it said.
US customers in select states will soon be able to borrow 30% of your Bitcoin holdings in cash. Eligible customers are invited to sign up on the waitlist for early access on Coinbase today.
— Coinbase (@coinbase) August 12, 2020
“More control” over crypto holdings
Coinbase said it wants to give customers “even more” control over their crypto investments while offering secure access to cash at the same time. And after the announcement, US customers in eligible states* will be invited to join the waitlist for the option to borrow up to 30% of their Bitcoin holdings.
The announcement, the exchange noted, was a result of customer feedback centered on freeing up capital for everyday transactions, as Bitcoin and cryptocurrencies are not widely used/accepted for payments as of today.
But with the loan feature, users can free up cash for immediate expenses without selling their Bitcoin and incurring high overdraft fees on credit cards.
“We hear from customers that they need cash for expenses like home renovations or car repairs, but they do not want to prematurely sell their crypto, or take out high-interest loans that could come with 20%+ APR,” said Coinbase, adding that the “portfolio-backed loans” allows customers to “borrow cash quickly.”
The announcement added:
“No need to fill out a long application or go through a credit check. Customers can simply sign up with a few taps and get the cash in their accounts within 2–3 days.”
Eligible customers can join the waitlist today, and Coinbase will offer access to customers starting this fall, it concluded.
Bitcoin demand spikes
The move comes as demand for Bitcoin and cryptocurrencies has grown in the past few weeks, as a result of corporations searching a “global hedge” and the DeFi market serving as an attractive investment venture for some.
This week, Nasdaq-traded firm MicroStrategy said it purchased over $250 million in Bitcoin to protect against the ill-effects of overinflation and money printing. The firm called the pioneering digital asset as a “new, tested, and superior” form of money than existing options.
As I suggested 6 months ago, we are now starting to see businesses owning Bitcoin as a marketable security on their balance sheet. MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset. Just. Getting. Started. https://t.co/dVUOr8Loac
— Preston Pysh (@PrestonPysh) August 11, 2020
Prominent crypto entrepreneurs like Barry Silbert of Digital Currency Group commented MicroStrategy was now a “publicly-traded Bitcoin play.” His comments weren’t unfounded — the firm’s stock rose over 10% on the announcement.
MicroStrategy, a $1.2 billion company, just turned itself into a publicly-traded bitcoin play. Smart https://t.co/tCXiAVc8w7
— Barry Silbert (@barrysilbert) August 11, 2020
MicroStrategy joined the ranks of hedge fund legends like Paul Tudor Jones in terms of choosing Bitcoin to protect against a grim economic outlook.
And that might just turn out a great decision.