A new mortgage product from Better and Coinbase allows borrowers to use Bitcoin or USDC as collateral without selling, aiming to provide home financing access. Bitcoin critic Peter Schiff warns the model exposes lenders to high default risk if the volatile cryptocurrency’s value crashes, shifting danger away from the borrower.
A new mortgage product from Better and Coinbase allows borrowers to pledge cryptocurrency for a home down payment without liquidating assets. The product is designed to avoid triggering taxable events for holders while providing access to financing.
Bitcoin critic Peter Schiff argued the structure poses a significant risk to lenders. “Allowing homebuyers to pledge Bitcoin as a down payment on mortgage is a horrible idea, as it substantially increases the risk for lenders,” he stated on X.
Schiff further warned that a crash could erase the collateral’s value entirely. He later characterized the model as a “scam to keep people from selling their Bitcoin to buy houses.”
According to the companies, the borrower’s crypto collateral would not face margin calls if Bitcoin’s price falls. Collateral would only be liquidated if a payment delinquency extended past 60 days.
The launch coincides with renewed volatility in Bitcoin’s market price. The cryptocurrency recently fell below $69,000, shedding about 2% in a 24-hour period.
Some analysts view the current market downturn as a potential accumulation phase. They note short-term holders are in a state of capitulation.
The product sits at the intersection of crypto adoption and traditional finance. It highlights a debate over using volatile digital assets as collateral for major real-world purchases like homes.
