The post Coinbase’s Crypto-Backed Loans Notch Record Liquidations Amid Bitcoin, Ethereum Plunge appeared on BitcoinEthereumNews.com.

In brief Thousands of Coinbase users lost money this week as crypto-backed loans soured. The exchange’s users have faced $170 million in liquidations over the past week. The losses represent the most in the product’s one-year history. Coinbase customers are experiencing pain in new ways as Bitcoin and Ethereum tumble, with losses piling up for thousands of users through the exchange’s crypto-backed lending product. Over the past week, Coinbase users have lost $170 million worth of collateral through liquidations on DeFi platform Morpho, according to a Dune dashboard. As Bitcoin and Ethereum notched double-digit declines, some 2,000 users lost $90.7 million on Thursday alone. When Coinbase began providing access to Bitcoin-backed loans last year, the company positioned the product as a way for people to grow their wealth. It later expanded to Ethereum-backed loans, while raising loan limits to $5 million per customer.  As Bitcoin and Ethereum have respectively dropped 17% and 26% over the past week, an increasing number of users’ loans have reached the point where they are considered unhealthy, allowing third-parties to repay them—and scoop up the collateral at a discounted rate. As users’ loans have approached the point of liquidation, some have added more collateral or paid down debts in the form of Circle’s USDC stablecoin. Over the past week, around 3,300 users have sat idle as their Bitcoin and Ethereum was whisked away for good. The losses may be a small sum amid the broader crypto crash, but the dynamic shows how Coinbase’s efforts to fold DeFi into its business can directly impact users as the company pursues its ambitions of becoming an “everything exchange.”  Since its debut last January, the product has originated $1.8 billion in loans. If users’ collateral were to fall another 50% in value, Coinbase users could lose $600 million,…

---

Filed under: News - @ February 6, 2026 7:25 pm