TLDR
- Coinbase launches Ethereum-backed loans, but stock drops by 6.81%.
- Ethereum-backed loans introduced, but Coinbase stock sees a sharp decline.
- Coinbase expands lending with ETH-backed loans, despite stock dip.
- Coinbase’s Ethereum-backed loans don’t boost stock as expected.
- Ethereum-backed loans launched, yet Coinbase stock falls in volatile market.
Coinbase Global, Inc. (COIN) saw a sharp drop in its stock price, falling by 6.81% from $257 to $239.77 by 2:19 PM EST on November 20.
Coinbase Global, Inc., COIN
This comes despite the company’s recent announcement that it has expanded its on-chain loan offerings to include Ethereum-backed loans. The new feature allows eligible customers to borrow USDC stablecoin using their Ethereum (ETH) holdings as collateral. This move is part of Coinbase’s broader effort to diversify its loan offerings and reduce selling pressure in the volatile crypto market.
Ethereum-Backed Loans Expand Coinbase’s On-Chain Lending
Coinbase has expanded its on-chain lending product to include Ethereum (ETH) as collateral. The service already supports Bitcoin (BTC)-backed loans, and now customers can borrow up to $1 million in USDC using their Ethereum holdings. The move comes after the success of the Bitcoin-backed loan product, which has already facilitated over $1.25 billion in loans. This extension to Ethereum-backed loans follows the growing demand for crypto-collateralized lending as decentralized finance (DeFi) platforms continue to dominate the crypto lending space.
The loans, powered by the Morpho lending protocol and running on Coinbase’s Ethereum Layer 2 network Base, are designed to provide users with access to liquidity without selling their assets. Customers can maintain ownership of their ETH while unlocking cash in the form of USDC, helping them avoid potential taxable events. “People should be able to access liquidity without needing to sell the assets they believe in,” said Ben Shen, Coinbase’s senior product director. The service aims to serve long-term holders of Ethereum looking for liquidity for personal expenses or debt refinancing.
As part of the service’s design, Ethereum-backed loans use wrapped ETH (WETH) as collateral, with plans to include staked ETH in the future. Coinbase plans to further expand the list of assets eligible for collateralized lending, including options available for trading on the platform. This feature is available to customers in most U.S. states, excluding New York, with broader international availability planned for the future.
Coinbase’s Crypto-Collateralized Lending Grows Amid Market Shifts
The introduction of Ethereum-backed loans is part of Coinbase’s broader strategy to capitalize on the growing trend of crypto-backed lending. According to a Galaxy Research report, crypto-collateralized lending reached a record $73.6 billion in Q3 2025, with DeFi platforms holding more than half of all outstanding loans. Coinbase’s expansion into this space aligns with this broader trend, as users increasingly seek alternatives to centralized lenders. As Coinbase continues to grow its on-chain loan services, it aims to position itself as a key player in the evolving decentralized credit market.
The introduction of Ethereum-backed loans follows a similar success with Bitcoin-backed loans, which have already been used by Coinbase customers. The company’s goal is to expand its on-chain loan products to include more assets and provide additional liquidity options for users. With the addition of Ethereum, Coinbase hopes to attract more users looking for ways to leverage their digital assets without selling. As the on-chain economy continues to grow, Coinbase’s position in the market appears set to expand further.
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