- Exchange-based Ether holders can borrow up to $1,000,000 using ETH as collateral.
- This provides access to liquidity/cash without selling their holdings.
- The service is available in all U.S. states except New York.
Leading exchange Coinbase has introduced a new feature that may reduce selling pressure during the current volatility in the crypto market.
The trading platform has launched ETH-backed loans that allow users in most U.S. states to access on-chain cash without having to liquidate their assets.
Notably, borrowers can pledge their ETH holdings as collateral and take out loans up to $1,000,000 denominated in USDC stablecoin.
The team confirmed on X:
ETH-backed loans are here. You can borrow USDC against your Ethereum, unlocking liquidity without selling.
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 🛡️ (@coinbase) November 20, 2025
This step is important for Ethereum holders who want liquidity without disposing of their tokens.
Instead of selling ETH and potentially missing out on future appreciation, Coinbase users can leverage their balances while keeping them intact.
How do ETH-backed loans work?
The process is straightforward. Users deposit Ethereum into their Coinbase accounts as collateral to borrow USDC.
Once the loan is repaid, the collateral is returned to the user.
In the meantime, borrowers enjoy considerable flexibility.
Individuals can maintain exposure to their assets, access funds almost immediately, and use USDC for various on-chain activities, including everyday spending and trading.
However, borrowers should be aware that Ethereum price fluctuations can affect their loans.
For example, a rapid drop in ETH’s value could trigger a margin call requiring additional collateral to avoid liquidation.
Why this matters
Accessing cash often forces crypto investors to sell assets, which can create tax events and reduce exposure to potential gains.
Coinbase addresses this with ETH-backed loans that unlock liquidity without requiring asset sales.
This move illustrates how crypto firms are expanding beyond basic trading services.
Many platforms are integrating lending, borrowing, and yield features as adoption of digital assets continues to grow.
Additionally, the offering signals Coinbase’s confidence in Ethereum as a legitimate financial instrument—comparable to traditional collateral like real estate or stocks.
Earlier this year, Coinbase rolled out crypto-backed loans focused on Bitcoin, aiming to give users more control over their finances while emphasizing security, speed, and transparency.
The team stated:
Crypto-backed loans are another meaningful step toward giving our customers greater control over their financial lives. Coinbase customers can now access everyday financial services more easily and quickly.
The new product reflects growing demand to mainstream crypto services.
ETH price outlook
The announcement comes as Ethereum faces prevailing bearish sentiment.
ETH is trading around $2,837 after falling more than 3% on the day and 13% over the past week.
ETH needs to hold support above $2,800 to avoid larger declines.
A sustained recovery will likely require heavy trading volume and renewed institutional interest—potentially via ETFs—to lift Ethereum out of its current lull.