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Johny Fernandez: Cryptocurrency
Exchange Coinbase is now

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allowing customers to borrow as
much as 40% of their Bitcoin

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value up to 1 million with no
credit checks. And this was all

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announced last week. So, Sean,
this is something that it's a

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little bit of a game changer,
the borrowing minimum, maximum

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amounts vary through state
that's something that they

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announced and the loans that
will be issued with the annual

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percentage rate of 8%. And
borrowers borrowers will not be

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required to show credit checks,
customers can obtain the cash

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using their Pay Pal account or
bank account. And they will need

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to make a minimum of a $10
monthly interest payment, and

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coin, Coinbase is offering
flexible repayment schedules. So

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when you hear this Sean, I mean,
someone that's in this specific

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space? Is this something that
you think is going to take off?

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Sean Murray: I do.

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Johny Fernandez: Okay.

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Sean Murray: I think it will,
because one of the downsides to

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putting your money in Bitcoin,
is you lose access to the cash

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at the trade. If you have
$20,000 and you feel like

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Bitcoin is definitely going to
go up talking about people who

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are speculating on it. Feel like
Bitcoin is definitely going to

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go up. And you want to put
$20,000 in Bitcoin, the trade

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off is that you don't have
$20,000 to actually manage your

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day to day, right. So what you
could do is you could put the

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$20,000 in Bitcoin, and then you
could borrow your own cash back

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against it. So you can have
access to the cash while being

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invested in Bitcoin at the same
time, everyone would do this in

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a heartbeat. If the interest
rate was was zero, that there

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has to be some interest rate.
You said it's 8% percent, right?

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Yeah. So if the interest rate
was zero, every single person

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would do it. Right. If you could
put $20,000 into Bitcoin and and

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borrow, borrow the money back,
and there was no cost for you to

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do, you're basically making a
risk free bet on Bitcoin. But,

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you know, the caveat is the 8%
interest rate that you're paying

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to Coinbase for borrowing your
own money, right? And you said

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something like, you can only
borrow up to 40% of your

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Johny Fernandez: As much as 40%
of the Bitcoin value up to a

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million.

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Sean Murray: Yeah, that's to
protect the downside risk for

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Coinbase. Like if you have a
million dollars in Bitcoin and

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you borrow a million dollars and
bitcoins value shrinks to like,

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let's say that million dollars
in Bitcoins shrinks to 500k. And

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you're walking around with $1
million, all of a sudden,

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Coinbase is exposed because
their collateral is only 500k.

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So if you defaulted on that loan
to Coinbase, Coinbase will be

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out 500 grand, there will be a
true lender that would have to

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deal with a lot of headaches, if
the value of the collateral was

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way less than what they gave
you. So they're protecting

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themselves from downside risk by
by capping it at 40% of your own

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crypto portfolio or I guess
Bitcoin portfolio. I don't know.

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I think it's something that
people are going to take

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advantage of. It's something
that I thought a lot about just

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in the last week, and I think
it's something that everyone

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should keep their eye on.