Coinbase Bitcoin Loans Hit $1B, Target $100B by 2030

Coinbase’s Bitcoin-backed lending program has demonstrated remarkable traction since its January 2025 launch, surpassing $1 billion in originations within just eight months. The current run rate of approximately $125 million per month provides a clear benchmark for measuring progress toward CEO Brian Armstrong’s newly announced $100 billion lifetime originations target. This rapid adoption reflects growing institutional and retail interest in leveraging Bitcoin holdings without selling the underlying asset.

The path to $100 billion requires substantial growth beyond the current linear trajectory. According to CryptoSlate calculations, reaching this target by 2030 would necessitate approximately 7.7% compounded monthly growth from today’s base. More aggressive timelines would demand even steeper growth curves: achieving the goal by 2029 would require roughly 9.6% monthly growth, while a 2027 target would need about 21.2% monthly expansion. These growth rates highlight the ambitious nature of Armstrong’s vision and the need for significant scaling in both dollar liquidity and per-loan ticket sizes.

Coinbase’s lending infrastructure leverages sophisticated on-chain mechanics to manage risk and ensure operational efficiency. The platform uses Coinbase-wrapped Bitcoin (cbBTC) as collateral, which is backed 1:1 by Bitcoin under custody with public proof-of-reserves and canonical addresses published. This collateral is routed to Morpho markets on Base, where utilization sets a variable interest rate every block, and USDC is delivered directly to borrowers’ Coinbase accounts.

Risk management is central to the platform’s design, with automatic liquidation triggered when the loan-to-value ratio reaches 86 percent. The 4.38 percent liquidation penalty creates strong incentives for borrowers to maintain adequate collateral buffers. The liquidation thresholds vary significantly based on starting leverage: borrowers entering at 30% LTV have a 65% drawdown buffer before facing liquidation, while those at 50% LTV face liquidation after just a 41.9% price decline. This structure emphasizes the importance of conservative borrowing practices during periods of Bitcoin price volatility.

Rate sensitivity represents another critical risk factor. Since Morpho markets set borrowing costs at the block level based on utilization, sudden increases in USDC demand can significantly impact effective rates. This volatility matters particularly for larger tickets and multi-month balances where borrowers expect payment stability. Morpho has addressed this through governance and incentive changes designed to grow USDC supply and rebalance utilization, creating the foundation for higher single-loan limits demanded by high-net-worth users.

The broader credit environment has turned favorable for asset-backed structures, creating tailwinds for Coinbase’s lending ambitions. Decentralized lending outstanding reached $26.47 billion in the second quarter of 2025, representing a 42 percent quarter-over-quarter increase. Combined DeFi, CeFi, and tokenized credit markets continue their upward trajectory, while traditional finance players like KKR have closed a $6.5 billion raise for asset-based finance, illustrating broader institutional demand for secured credit instruments.

Coinbase’s distribution model, sometimes called the ‘DeFi mullet,’ combines traditional account primitives with permissionless settlement. Borrowers initiate and manage positions using familiar Coinbase security and reporting features, while actual lending, collateralization, and liquidations occur in open markets on Base. This hybrid approach has supported partner-led inflows without requiring users to operate new wallets or navigate complex pool selection, significantly lowering adoption barriers.

Scale on the back end remains crucial for achieving growth targets. Total deposits rose into the low teens in billions over the summer, with Morpho data showing Coinbase-connected collateral passing $1 billion with several hundred million in active loans during mid-year. According to DefiLlama, daily transactions and active addresses remain elevated with a double-digit-billion bridged TVL, supporting reliable liquidation execution and faster recycling of collateral into fresh originations. The number of lifetime loans needed falls materially as average ticket sizes increase, tying the growth path directly to capacity on both the collateral and USDC sides of the book.

The platform’s growth faces several key challenges, particularly around collateral price paths and liquidity during utilization spikes. The market backdrop still carries lessons from 2022, when maturity mismatches and collateral concentration stressed centralized lenders. While structural differences exist in Coinbase’s approach—including on-chain collateral handling and programmatic liquidation—dollar liquidity during stress events remains a central variable that could impact origination capacity and liquidation execution costs.

Tracking Base activity, bridged TVL, and Morpho market utilization provides real-time context for assessing system resilience in both calm and stressed conditions. The mechanics to support significant scaling are already operational, but the next phase depends on how quickly dollar liquidity and borrower mix can expand on-chain. Current U.S. availability excludes New York, representing additional geographic expansion potential as regulatory clarity improves.

As Coinbase moves up-market to attract larger borrowers, the platform will need to balance growth ambitions with risk management. The combination of traditional finance security, on-chain efficiency, and institutional-grade risk controls positions Coinbase uniquely in the evolving crypto lending landscape. With the foundational infrastructure in place and favorable market conditions, the journey toward $100 billion in lifetime originations represents one of the most ambitious scaling efforts in modern financial technology.