Both let you borrow against Bitcoin without selling, but they are built on opposite foundations. Coinbase's loan is a decentralized finance (DeFi) product with a Coinbase front end; Arch is a centralized lender (CeFi) that pairs a low rate with a federally chartered custodian. The right one depends on what you value: the lowest floating rate and speed, or US dollars with independent custody and a human to call.
This is an independent comparison, not advice. Coinbase figures are a snapshot because its rate floats; Arch figures are verified weekly.
The core difference
Arch holds your Bitcoin with Anchorage Digital, a qualified custodian, and lends you US dollars, with a 24-hour cure window if your loan-to-value climbs too high. Coinbase converts your Bitcoin to cbBTC, supplies it to a Morpho market on Base, and lends you USDC, with liquidation enforced automatically by code. One is a company you trust, backed by an independent custodian; the other is a protocol plus Coinbase's custody of the wrapped-Bitcoin backing. Our CeFi vs DeFi guide covers why that distinction drives everything else.
Where they differ
- Rate. Coinbase is usually cheaper on the headline number (recently around 5 to 6 percent, variable, no ceiling) than Arch (from about 7.25 percent). Arch's quoted APR already folds in its 1.49 percent origination fee, and it does not float.
- What you receive. Arch pays US dollars. Coinbase pays USDC, a stablecoin you convert yourself.
- Custody. Arch uses Anchorage, a qualified custodian, and does not re-lend your Bitcoin, backed by Lloyd's of London insurance. Coinbase locks cbBTC in the Morpho market (not re-lent there), but the underlying Bitcoin is custodied by Coinbase. Read our rehypothecation explainer for why that matters.
- On a margin call. Arch gives you a cure window and liquidates only partially, with a support line. Coinbase liquidates automatically on-chain at about 86 percent loan-to-value, with no guaranteed grace period.
- Speed. Coinbase funds in about a minute; Arch in about a day.
Who picks which
Lean Arch if you want US dollars in your bank, a federally chartered qualified custodian with named insurance, a cure window, and only partial liquidation if things go wrong. Lean Coinbase if you want the lowest available rate and near-instant funding, you are comfortable holding USDC and managing automatic liquidation, and you already keep Bitcoin on Coinbase. Some borrowers use both for different needs.
How we cover each
Read our Coinbase loan review and Arch review for the full detail. To see how Arch's rate sits against the rest of the centralized market, check the BoB Bitcoin Loan Rate Index, and compare every US lender in our main comparison.