Go Big with Gib Podcast
Go Big with Gib is a podcast for professionals, business owners and entrepreneurs to talk about their big wins.
Go Big with Gib Podcast
Ep 107. Borrowing Against Bitcoin on Coinbase -- How it Works
We unpack how to borrow against Bitcoin on Coinbase using Morpho to access liquidity without selling, and why risk management and LTV discipline determine success. We show the mechanics, the danger zones, and the exit rules that keep you in control.
• using Bitcoin as collateral instead of selling
• Coinbase and Morpho workflow from BTC to USDC
• understanding LTV, liquidation thresholds, and alerts
• conservative starting LTV and 65 percent danger zone
• interest, time drift, and non-passive monitoring
• productive uses of borrowed funds and exit rules
• who should avoid leverage and why
• leverage as a tool, not a gamble
If this helped you, share it with someone who still thinks Bitcoin is only about buying and selling
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Welcome to the Go Big With Gibb podcast, where we talk to professionals, business owners, and entrepreneurs about their big wins. A lot of people think the only way to use Bitcoin is to buy it and eventually sell it. But today, I'm going to walk you through something more advanced and more powerful when used correctly. Borrowing against your Bitcoin instead of selling it. Specifically, how this works on Coinbase using a lending protocol called Morpho. This is not hype, this is mechanics, risk management, and capital efficiency. Here's the core concept. Instead of selling your Bitcoin to get cash, use it as collateral to borrow against. Why would someone want to do that? Because selling Bitcoin can trigger capital gains, reduce long-term exposure, force bad timing decisions, whereas borrowing lets you access liquidity, keep your Bitcoin, stay positioned for future upside. But, and this is critical, it only works if you understand the risk. Step one, hosting Bitcoin as collateral. On Coinbase, the process starts by selecting Bitcoin as collateral. Behind the scenes, your Bitcoin is converted into a tokenized version called CBBTC. That C B BTC is deposited into a morpho lending market. Your Bitcoin is no longer tradable while it's collateralized, but it's still yours. This collateral backs your loan. Step two, borrowing USDC. Once your Bitcoin is posted, you can choose how to borrow. The loan is issued in USDC, a dollar pegged stablecoin. That USDC shows up instantly in your Coinbase account. There is no credit check, no fixed repayment schedule, no required monthly payment, but don't confuse flexibility with safety. Risk still exists. Step three, understanding LTV. This is the most important concept loan to value or LTV. LTV means your loan amount divided by the value of your Bitcoin collateral. For example, if you have$40,000 of Bitcoin and a$20,000 loan, that's a 50% LTV. Coin-based loans typically liquidate around 86% LTV. If you hit that level, part of your Bitcoin is automatically sold. The loan is repaid, you don't get a warning phone call. So smart borrowers never go near that line. Step four, risk management. This is where people mess up. Experienced borrowers usually start at 40 to 50% LTV. Treat 65% as a danger zone and act before liquidation is possible. Why? Because Bitcoin is volatile. If the price drops, collateral value drops. LTV rises, and risk increases. That strategy is not passive. You must monitor it. Step five, interest and time. These loans accrue interest often around 6 to 7% annually. That means your loan balance slowly increases. Your LTV slowly creeps higher. Time matters just as much as price. This strategy works best when Bitcoin appreciates faster than the interest rate or when borrowed funds are used productively. Can Bitcoin pay off the loan? The answer is yes. And this is the elegant version. If Bitcoin appreciates enough, you can sell a portion of Bitcoin, pay off the loan completely, and still end up with more Bitcoin than you started with. But this only works with conservative leverage. Clear exit rules exist and emotional discipline. This is not for everyone. You should not borrow against Bitcoin if you panic during drawdowns. You're tempted to maximize leverage. You don't have a downside plan. You think liquidation won't happen to you. It happens fast and it's unforgiving. So here's the final takeaway. Borrowing against Bitcoin on Coinbase is a powerful tool, a way to access liquidity without selling, a strategy that rewards discipline. But leverage is a blade used carefully. It builds wealth, used emotionally, it destroys it. If this helped you, share it with someone who still thinks Bitcoin is only about buying and selling. This is how sophisticated investors think about capital, not just assets. Until next time, stay disciplined and go big.