It’s not news anymore that global crypto adoption is highly on the rise. From reports of sports athletes requesting to be paid in Bitcoin, to political office holders doing the same. In fact, Bitcoin and other cryptocurrencies seem to have practically infiltrated every sphere of the global economy.
Interestingly, one of such industries where Bitcoin is gaining so much ground right now, is the real estate industry. As reported in a recent news for instance, Milo — a Miami-based fintech startup, has just introduced what it calls the world’s first ever Bitcoin mortgage. With this, the digital bank is looking to allow crypto investors use their digital assets as collateral to purchase real estate in the U.S.
In fact, Milo even confirms that only customers wanting to use Bitcoin (BTC) as collateral qualify for its 30-year mortgage loan. The company says:
“Instead of selling your crypto for a down payment to qualify for a mortgage, a crypto mortgage lets you leverage your crypto to invest in real estate.”
All You Need To Know About Bitcoin Mortgage
Surely, the idea of getting a Bitcoin mortgage is an entirely new concept, one that needs critical analysis. And so far, it remains unclear how much BTC will be enough to secure a loan, or the level of overcollateralization that would be needed, considering the level of volatility of the digital asset.
For starters, it is a valid question to ask whether the mortgage is double backed. That is, by both the house and the BTC collateral. Or maybe it just mean one gets to choose which of the options to liquidate if the time comes.
Another angle to think from would be in the event that BTC crashes, what then happens?. If this was a loan for people who don’t really need loans, maybe there wouldn’t be so much apprehension about it. However, considering the fact that it might be some people’s entire life savings in the form of BTC, how do they stay safe and not lose both their home and their BTC assets?
Meanwhile, other crypto believers might want to argue differently. For sure, crypto is a great store of value, and for those whose eyes are set on the possibilities of making one’s last mortgage payment and then getting back 30 years worth of gains on your BTC, there’s not so much one can do to convince them otherwise.
However, so many questions abound regarding this Bitcoin mortgage, and maybe until there’s more clarity about its terms, it might be safer to stay away from it for the time being.
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