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Coinbase Now Allows Users to Borrow as Much as $1 Million with a Bitcoin Credit Line -Breaking

by Mike Robinson

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Coinbase now allows users to borrow as much as $1 million with a Bitcoin credit line

Coinbase (NASDAQ 🙂 has announced its new loan program. Hodlers can use the platform to borrow as high as 40% of their stack and up to $1,000,000 total. Participating in this program won’t need to have a credit check. They will just pay an annual 8 percent percentage yield (APY) and no monthly fees.

More importantly, borrowers won’t have to cash out their Bitcoin, which is a taxable event in the U.S. The IRS currently classifies cryptocurrencies as “property” not securities. As such, that asset class is taxed at the short- or long-term capital gains rate depending on how long you’ve held an asset.

The most current short-term rate for cryptocurrency holders who have held it less than a year is 10-37% depending on their income and filing status. The long-term rate of tax applies if you have a digital asset that is more than one year. It can range from zero to 20% on profits.

The Coinbase APY represents a substantial savings in comparison. Additional features of Coinbase include:

  • There are no transaction fees
  • The Bitcoin line of credit offers flexible payment terms
  • You can instantly add borrowed funds to PayPal (NASDAQ) or to a bank through ACH

According to Coinbase, borrowers are required to pay only the monthly interest ($10 min), and then the principal balance. Additionally, the Bitcoin used as collateral remains safely stored in the Coinbase vault – it’s not lent out or used for any other purpose.

To The Flipside

  • Coinbase, despite being one of crypto’s most respected names, is still a central exchange.
  • It is therefore a frequent target of hacker attacks, as well as security concerns.

What are the reasons to care?

This offer has the real advantage of allowing you to keep your Bitcoin on-chain, enabling it to increase in value and not have to be sold for your emergency liquidity requirements.

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