How to Profit From Coinbase’s New Lending Program

TL;DR

• If we want to see more money flowing into the crypto space, we’re going to have to make it easier for big institutional players to enter the space via lending. Coinbase is making this happen.

• Coinbase has put aside a cool $57M to start its lending business, but the company will also grow its reach by giving customers the ability to get in on the action.

• All loans will be overcollateralized – meaning Coinbase will never lend out more than you give it (e.g. you lend them $1, they loan out $0.80).

• With Coinbase’s lending system, unlike traditional banks that pay an average of 0.43% annual interest, it’s an opt-in service and (if it’s anything like the rest of the crypto lending world) will return 3-8% per year.

Full Story

If you’re a big company and you want a loan, there’re a TON of trusted banks you can go to and get cashed up…but what if you want a crypto loan?

There isn’t exactly a sea of trusted/regulated companies you can turn to and take out a big chunk of change.

And that’s a problem.

If we want to see more money flowing into the crypto space, we’re going to have to make it easier for big institutional players to enter the space via lending.

Good news is, Coinbase is taking one for the team and making this happen.

Now. Here’s where you can benefit:

Coinbase has put aside a cool $57M to start its lending business, but the company will also grow its reach by giving customers the ability to get in on the action.

The basic gist is this:

You lend the folks at Coinbase some crypto → they lend it to big-dog investors → Coinbase pays you interest on your loan.

The risks = these borrowers could default on their loans and you could lose your crypto (this risk increases substantially if/when markets crash).

The safeguards = these loans will be made to big institutional companies (not degens), which means they’re more likely to have decent cash reserves – ensuring they repay on time and in full.

Plus, all loans will be overcollateralized – meaning Coinbase will never lend out more than you give it (e.g. you lend them $1, they loan out $0.80).

Here’s why we love this:

If you have a bank account, your bank is not only charging you a monthly fee to have one, but it’s also lending your money out to institutional investors whether you like it or not.

(Paying you an average of 0.43% per year in return).

With Coinbase’s lending system – it’s an opt-in service and (if it’s anything like the rest of the crypto lending world) will return 3-8% per year.

Same same, but better.