Most of those exchanges aren’t available in the United States or the UK. 6.5% APY is better than what you can get on-chain for lending USDC, and the interest on your deposit is paid in Bitcoin and not an altcoin. Although, I wouldn’t use this myself, it is attractive enough for risk averse whales or institutions that want to earn yield without having any smart contract risk. Even at the base rate of 3.5%, that is $17,500 yearly paid in Bitcoin if you deposit the max amount.

As a risk taker and if I ever had an extra funds like that why not? Coinbase is a legit platform however I dont have one. The 6.5% is literally small and would not have make a huge impact but if you are a conservative user then this is fine profits considering you only gonna do is hold that asset there.

Yes its a private firm and a custodial site, you might wanna think around that too.

It's a good program that is better than interest of saving in bank, and it's good with people who have enough trust on centralized exchanges in general and trust on Coinbase in particular.

It's also good for people who want to keep money in stablecoins for example USDC when they see no opportunity in the market, during a bear market with a lot of risk for example. However, with the other people who see bear market is a very great opportunity and long time for Bitcoin accumulation, they will not see this offer as a good one.

With people who value full control and safety of their funds secured by themselves, they truly dislike this offer.

So like or dislike this offer, it's different with different people by taste of financial management, risk management and their stance on the market status now and in coming months.

Some people might want to take the risk without properly analysing the benefits or risk that's involved in staking money with centralized exchanges.

It's not even worth the money or time because I don't think for example the person whom op said told him it's a way to make profit would even put up to $10k into it and you  already have an insight of what anything less than $10k( let's say he is willing to stake just $1k) he will be receiving just $35 in the regular APY in a whole year. It's not worth the try.

I don't know the full details, but from the screenshot, it looks like the 6.5% is paid monthly. And if it's monthly, then it's not that bad. If you do as the OP said and use 500 dollars, you would get about 32% every month for 12 months. It's not much, but it's better than just letting the 500 dollars sit there and earn nothing. And we know that the higher the amount invested, the higher the return. Buying bitcoin to hold is a much better option, of course, but it doesn't hurt to just keep something else somewhere. Besides. It's a well known and big company.

Regardless of the specifics, keeping any cryptocurrency with a centralized entity is not a good practice, and that includes holding highly valuable Bitcoin. We have frequently heard about the many issues plaguing centralized exchanges, ranging from hacks, bankruptcies, or account blocking like the situation you mentioned, and more. We can easily find news reports about these incidents on Google.

I don't mean to scare anyone, but I just want you to understand the risks, and consequences involved in depositing your cryptocurrency (including Bitcoin) with centralized entities. Ultimately, the decision is yours, regarding whether or not you are willing to accept those worst-case scenarios.

It seems you already know that what you're saying is quite wrong.

Personally, I don't think this promotion is that great, as you still only earn 6.5% APY on the USDC you hold, which is only 0.54% over 12 months. Compared to the inflation rate (in the US), the actual return isn't that attractive.

But for the average person, they might find this an attractive option compared to keeping their money in the bank.

Wait, it's a bit different. BTC as the reward from users' USDC holdings. I think Coinbase is trying to take advantage of the growth of stablecoins itself while also trying to get exposure from BTC hodlers. Has anyone here tried it? Is there any investment limit?

I did try flexible earn features for stablecoins on some exchanges. They usually come with limits. The more you invest, the less you earn based on the lower APR you'll get.

On Bybit, the APR is 3.91% for ≤ 200 USDC investment, 0.91% for > 200 USDC. 6.61% APR through their Mantle Vault (Onchain).
On Bitget, the APR is 6.66% for 0 to 300 USDC investment, 1.60% for 300 to 1,000,000 USDC investment.
On Binance, the APR is 7.31% for ≤ 200 USDC investment, 2.31% for > 200 USDC.

Let's calculate that Coinbase offer.
6.5% : 12 = 0.54% for a month.

Let's say during this period BTC price stays at $79,000.
So, when the BTC price rises to $126,000 (ATH), that 0.54% reward will be worth 0.86% of your initial investment.

It's almost 1% a month. If that has no max cap, I think even institutions would find it interesting. CMIIW.

And no matter the APR which is being offered by the exchange, I don't think I can ever take the risk of leaving my money locked for a specific period. Banks are not all that good either, but at least the FDIC got customers back. Even in countries where the exchange is licensed there is no guarantee you can get your money back if anything happens to the exchange especially when they file for bankruptcy, some people take a lot of risk because of little reward that could be earned through holding.

You are saying the opposite of what was Tweeted, but the third person who comment has already made everything clear for better understanding, so there is nothing left to add. Responding to the bold part, what is the point of risking $500 of your monthly Bitcoin accumulation just to receive a shitcoin as reward? In my opinion, I would advise people to stop chasing free Bitcoins and stay consistence in accumulating Bitcoin on a weekly or monthly basis till they reach their accumulating target and then hold it for the long term.