Inside Coinbase’s new crypto index and Bitcoin loans

For many, crypto investing still feels like an exclusive club—full of complicated jargon, unpredictable price swings, and a steep learning curve. But Coinbase, one of the world's biggest crypto exchanges, is hoping to make it more accessible with two major new products: the Coinbase 50 index fund and a Bitcoin-backed lending service.

To break down these offerings, Coinbase’s Head of Research David Duong joined us in the studio, offering an inside look at how they work and what they mean for everyday investors.

Traditional stock market investors have long had index funds—baskets of stocks that track the broader market. Now, Coinbase is bringing that concept to crypto with the Coinbase 50, an index designed to represent the top 50 cryptocurrencies by market capitalization.

“We wanted to have something that would be a real benchmark for the investment performance and the overall performance of the broader crypto economy,” Duong explained.

Unlike many existing crypto benchmarks, which tend to focus heavily on Bitcoin and Ethereum, the Coinbase 50 aims to capture a broader range of digital assets. “We give people exposure to memecoins, for example, which typically people have been somewhat leery of on the institutional side,” Duong said.

“We give people exposure to decentralized physical infrastructure, or DeFi, which is a very crypto-native sector. We give you exposure to stablecoins as a sector, or payments as a sector, which is a massively growing sector.”

While Bitcoin and Ethereum still play a major role, the index highlights the diversity of the crypto ecosystem. “A lot of the existing crypto benchmarks really anchor themselves towards those smart contract platforms,” Duong noted. “But we want to get exposure for a lot of people to the other sectors of this space.”

Will investors be able to trade the Coinbase 50?

Right now, the Coinbase 50 is a benchmark index rather than a tradable product. However, Duong confirmed that the company is actively exploring ways to make it investable.

“People are looking at the Coin 50 index from their very similar lens of, ‘I can't track 50 different tokens because each of these protocols are very representative,’” he explained. “A lot of people have come to us saying they want the ability to trade the Coin 50 index.”

If Coinbase succeeds in turning the index into a tradable product, it could provide an easy, low-maintenance way for investors to gain broad exposure to the crypto market without having to manage dozens of individual tokens.

Borrowing cash without selling Bitcoin

Alongside the index, Coinbase has also launched a Bitcoin-backed lending service, offering users a way to borrow US dollars while keeping their Bitcoin holdings intact.

“This is going to bring crypto-backed loans to exemplify Coinbase’s commitment to bringing customers’ financial lives on-chain,” Duong said.

The new service allows Bitcoin holders to take out loans without selling their crypto, using their BTC as collateral. Loans are issued in USDC (a US dollar-backed stablecoin) and come with flexible repayment terms.

“If you are going to have Bitcoin for the long haul… now you can borrow, get your Bitcoin instead of selling it,” Duong explained. “If you want to get access to that cash for big expenses, a new car, a down payment on a home, you can do that with these crypto-backed loans.”

The initial borrowing limit is capped at $100,000, but Duong hinted that Coinbase is open to increasing that limit based on user demand.

What’s next?

As the conversation wrapped up, Duong suggested that these two products are just the beginning of what Coinbase has planned for 2025.

“There are a lot of things waiting in the wings,” he said. “There will be people at Coinbase who will speak much better and probably speak much more fluently about all the things that are happening, as well as some of the other product lines that Coinbase has.”

With these new offerings, Coinbase is working to make crypto investing and borrowing more accessible and user-friendly, whether you're a seasoned trader or just taking your first steps into digital assets.

 

Listen to the whole interview on The Crypto Radio's live player or in the Bigger Picture podcast.