Coinbase has announced plans to launch spot borrowing with up to 10x leverage, enabling eligible traders to leverage collateral for purchasing cryptocurrencies on spot markets. However, US users who fail to meet the criteria for Eligible Contract Participants will be barred from using the feature.
According to the exchange’s October 7 announcement, the feature is scheduled to roll out over the next few weeks. Availability relies on individual customer eligibility and specific jurisdictions, though Coinbase has not disclosed the approved countries, meaning access cannot be taken for granted for every international trader.
Regarding US individuals, a 2021 statement from a Commodity Futures Trading Commission (CFTC) commissioner defines these thresholds as discretionary investments totaling more than $10 million, or over $5 million if the transaction serves a risk-management purpose. This high financial bar keeps the upcoming offering out of reach for typical US retail investors.
This limitation targets spot borrowing specifically. Coinbase notes that affiliates provide the product, keeping it distinct from Coinbase Financial Markets, the entity responsible for US derivatives.
For US clients, margin lenders will include Coinbase Custody International Limited or Coinbase Credit, Inc., even though users will oversee both their spot borrowing and derivatives risk through a unified margin portfolio.
Coinbase finalized its migration to Deribit on October 2, paving the way for this broader expansion, while the new spot-margin initiative introduces a separate borrowing avenue for qualified traders.
Collateral remains exposed
For traders who meet the eligibility requirements, maximum leverage reaches up to 10x on select major cryptocurrencies and 5x on other supported digital assets.
Coinbase stated that users can utilize more than 15 supported assets as collateral, which will stay housed within the exchange. Real-time tracking for loan balances, collateral levels, and overall margin health will be accessible across all active borrows.
Leaving collateral on the exchange does not shield it from forced sales. Coinbase cautions that borrowed trading amplifies both profits and losses, collateral faces potential liquidation without warning, and total losses can surpass the initial deposit amount.
Specific details regarding borrowing rates, collateral valuation haircuts (discounts applied to pledged assets), and liquidation thresholds were omitted from the announcement. These exact terms will dictate the overall cost of the service and the precise conditions under which collateral becomes vulnerable.
Frequently Asked Questions
Who is eligible for Coinbase’s new 10x spot leverage product?
The product is available to eligible traders in selected jurisdictions, but US retail customers are excluded unless they qualify as Eligible Contract Participants, which generally requires discretionary investments exceeding $10 million (or $5 million for risk management).
What is the maximum leverage offered?
Coinbase sets maximum leverage at up to 10x on selected major assets and up to 5x on other supported digital assets.
Are my deposited assets safe from liquidation?
No. Coinbase warns that collateral can be liquidated without prior notice, borrowed trading increases both gains and losses, and total losses can exceed your initial deposit.
Which entities provide the margin loans for US customers?
For US clients, the designated margin lenders are Coinbase Custody International Limited and Coinbase Credit, Inc.
