Coinbase Plans 10x Spot Leverage, Excluding Most U.S. Retail

Coinbase plans to launch spot borrowing in the coming weeks, allowing eligible customers to borrow against crypto collateral to buy assets on spot markets. Access will depend on customer eligibility and jurisdiction. Coinbase has not identified the countries where the service will be available outside the United States.

The exchange announced the planned product on Oct. 7. Leverage will reach 10x for selected major assets and 5x for other supported assets. Customers will be able to post collateral in more than 15 supported assets. Loan balances, collateral levels and margin health will appear in real time across open positions.

In the United States, access will be limited to Eligible Contract Participants. A 2021 statement by a Commodity Futures Trading Commission commissioner described the category as including customers with more than $10 million in discretionary investments, or more than $5 million when a transaction is used for risk management. The requirement excludes most individual U.S. traders.

The spot-borrowing service will be offered by Coinbase affiliates and will remain separate from Coinbase Financial Markets, the company’s U.S. derivatives business. For U.S. customers, loans will come from Coinbase Custody International Limited or Coinbase Credit Inc. Traders will manage spot borrowing and derivatives exposure through a shared margin portfolio.

Coinbase has not disclosed borrowing rates, collateral haircuts or the margin thresholds that would trigger liquidation. Those terms will determine borrowing costs and when pledged assets could be sold.

The company warns that leverage can increase gains and losses. Collateral may be liquidated without notice, and losses could exceed a customer’s initial deposit.

The planned service follows Coinbase’s completion of the Deribit migration on Oct. 2. Deribit provides cryptocurrency futures and options trading, while the new product will allow eligible customers to borrow funds for spot-market purchases.