Coinbase announced today that it has increased the number of U.S. states in which residents are eligible for Bitcoin-collateralized loans from the exchange. The company has also increased the percentage limit that customers can borrow on their Bitcoin holdings, from 30% to 40%.
The company is now offering fixed-term BTC collateralized loans to 17 states in the US and lines of credit to Arizona, California, and Iowa. The 17 states include Alaska, Arkansas, Connecticut, Florida, Illinois, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, and Wyoming.
Customers can now borrow up to $100,000 worth of cash against their BTC holdings with the exchange at a 7.9% APR interest on the loan. The loans also have a low payment minimum of $10 per month. Customers won’t be subjected to credit checks and there are no fees.
The amount is deposited to the customer’s bank or PayPal accounts and therefore quickly accessible for emergencies including car repairs and home renovations, or even buying property. With this product, customers do not have to exit their market positions by disposing of their BTC to get cash. Borrowing cash against the BTC allows them to continue exposing their BTC to profits arising from surges in price.
Institutions accumulating more BTC
Coinbase has seen a 170% increase in institutional investors hoarding into the currency. Coinbase’s head of hedge fund sales, Drew Robinson said that this signifies “growing interest from institutional investors seeking to take advantage of the crypto space” and interest from pension funds and hedge funds has skyrocketed this year with demand for crypto derivatives also growing.
At the same time, about 400 workers of ForUsAll Inc., a 401(k) provider will be able to invest up to 5% of their 401(k) contributions in Bitcoin, Ether, Litecoin, and other cryptocurrencies offered on the Coinbase crypto exchange. This follows a partnership between the two companies.
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