- Ether holders on the exchange can borrow up to $1 million in USDC using ETH as collateral.
- It 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 launched a new feature likely to reduce selling pressure amid the broader turmoil in the crypto market.
The brokerage has introduced Ethereum-backed loans, allowing users in most U.S. states to access on-chain liquidity without having to sell their holdings.
Notably, borrowers can use ETH assets as collateral and secure loans of up to $1,000,000 in the 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 move is important for Ethereum holders who want liquidity without dumping their tokens.
Instead of selling ETH and potentially missing future price gains, Coinbase users can leverage their balances while retaining exposure to the asset.
How do ETH-backed loans work?
The process is straightforward. Users deposit Ethereum into their Coinbase accounts as collateral to borrow USDC.
Collateral is returned when the loan is repaid.
Customers gain first-class flexibility: they can borrow while maintaining exposure to their holdings, access funds almost instantly, and use USDC for on-chain activities, daily expenses, or trading.
Borrowers should consider that Ethereum’s price volatility can affect their loans.
For example, a rapid decline in ETH’s value could require adding more collateral to avoid liquidation.
Why this matters
For many crypto investors, accessing cash usually means selling assets, sometimes creating tax implications.
Coinbase addresses this by offering Ethereum-backed loans, providing liquidity without forcing asset sales.
The development reflects how crypto firms are expanding beyond trading services.
Networks and platforms are increasingly integrating lending, borrowing, and yield solutions as digital assets gain broader adoption.
Moreover, the move underscores Coinbase’s confidence in Ethereum as a legitimate financial instrument, comparable to traditional assets like real estate and equities for collateral purposes.
Coinbase previously rolled out crypto-backed loans earlier in the year, with plans to include Bitcoin as well.
The aim has been to give users greater financial control while emphasizing security, speed, and transparency.
The team stated:
Crypto-backed loans are another large step toward giving our customers more control over their financial lives. Coinbase customers can now get easier and faster access to everyday financial services.
The new addition signals growing demand for such services as cryptocurrencies move toward mainstream adoption.
ETH price outlook
The announcement arrives as Ethereum faces strong negative sentiment.
ETH is trading around $2,837 after losing more than 3% over the past day and roughly 13% over the past week.
ETH needs to hold support near $2,800 to avoid further steep declines.
Recovery will likely require higher trading volumes and renewed institutional interest, including through ETFs, to reverse the current downturn.