In today’s rapidly evolving financial landscape, the line between digital wealth and traditional asset ownership is blurring. For individuals like 32-year-old Matta — a former vice president at Goldman Sachs who now leads Crescent Crypto and serves as president of 3iQ Digital Assets in the U.S. — this shift couldn’t come soon enough. Despite holding substantial net worth in Bitcoin and Ethereum, Matta found himself shut out by major banks like JPMorgan Chase and Bank of America when trying to secure a mortgage.
“I was literally laughed at on the phone,” Matta recalled in an interview with Fortune.
Like many in the growing class of crypto-native investors, Matta possessed significant wealth — just not in the form that traditional lenders recognize. With most of his assets locked in digital currencies, he didn’t qualify under conventional lending criteria based on FICO scores, income verification via tax returns, or U.S. dollar-denominated pay stubs.
Faced with rejection, Matta and his wife pivoted: they applied for the mortgage solely under her name, using only her traditional income and financial documentation. This workaround allowed them to purchase their apartment — but it also highlighted a systemic gap in real estate financing.
“Unfortunately, much of the real estate industry and traditional mortgage lending hasn’t truly integrated with the crypto space. It’s still not widely recognized,” Matta said.
The Rise of Crypto-Backed Mortgage Lending
As housing markets remain hot — driven by pandemic-era demand and limited supply — more crypto holders are seeking ways to leverage their digital assets without selling them and triggering capital gains taxes. Enter crypto mortgage lenders: a new breed of financial institutions bridging the divide between blockchain-based wealth and physical property ownership.
One such innovator is Milo, a crypto lending platform that launched a dedicated mortgage division last month. Milo enables clients to secure long-term loans for U.S. residential real estate by pledging Bitcoin as collateral — no cash down payment, credit check, or tax return required.
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Here’s how it works: A borrower seeking a $500,000 mortgage must deposit an equivalent value in Bitcoin. According to Josip Rupena, CEO and founder of Milo, this 1:1 collateral model ensures risk mitigation while opening doors for crypto-rich individuals.
Borrowers receive a 30-year fixed-term mortgage, making monthly payments to Milo. Interest rates range from 5% to 8%, adjusted annually based on Bitcoin’s market price:
- If Bitcoin appreciates, borrowers may withdraw excess collateral after one year.
- If Bitcoin depreciates, they may be required to post additional crypto to maintain loan-to-value ratios.
Once the loan is fully repaid, the original Bitcoin collateral is returned — allowing holders to preserve their long-term investment thesis while accessing liquidity.
“This avoids the need to sell crypto, realize gains, and pay taxes just to prove financial standing,” Rupena explained.
Despite high demand — with over 7,000 people on Milo’s waitlist — the company has yet to disburse its first loan. Rupena declined to disclose current customer numbers, citing ongoing regulatory and operational preparations.
Expanding the Ecosystem: Other Players in Crypto Mortgage Lending
Milo claims to be the first crypto lender offering a full 30-year mortgage term, but it’s far from alone in the space.
- In December, Ledn opened a waitlist for its own crypto-backed real estate loan product.
- BlockFi has long offered loans secured by digital assets, which borrowers can use for home purchases.
- Nexo made headlines in 2019 by financing a $1.2 million property in Amsterdam — a converted chapel bought by entrepreneur and former actor Brock Pierce — using crypto collateral.
These platforms are pioneering a new financial paradigm where digital assets function like any other qualifying wealth — without forcing owners to liquidate.
Traditional Lenders Test the Waters — Then Pull Back
Even legacy institutions have attempted to adapt. In August last year, United Wholesale Mortgage (UWM), the second-largest mortgage lender in the U.S., announced a pilot program accepting cryptocurrency as part of borrowers’ asset verification.
But just six weeks later, the program was suspended due to “increased costs and regulatory uncertainty.”
This hesitation underscores a broader challenge: while demand exists, widespread adoption requires clearer frameworks, standardized valuation methods, and regulatory clarity.
Market Potential and Future Outlook
According to the Mortgage Bankers Association, traditional lenders issued approximately $1.61 trillion in loans in 2021 alone. In contrast, crypto-backed mortgage volumes remain small — but growing.
Matthew Sigel, Head of Digital Asset Research at VanEck (which has no direct stake in crypto mortgage firms), believes adoption will hinge on reducing collateral requirements.
“Right now, these products require 100% collateralization. To go mainstream, they’ll need to move toward models like 20% down payments — something familiar to most homebuyers.”
Sigel notes that early-stage funds backed by VanEck’s affiliate Cadenza Ventures were seed investors in BlockFi and other global crypto lenders. He sees the current niche offerings as early indicators of a disruptive trend.
“They’re small in scale today,” Sigel said, “but this represents a crack in the foundation — one that could pose an existential threat to bank margins in the long run.”
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Frequently Asked Questions (FAQ)
Q: Can I use any cryptocurrency as collateral for a home loan?
A: Currently, most platforms accept only major cryptocurrencies like Bitcoin and Ethereum due to their liquidity and relative price stability.
Q: What happens if the value of my crypto drops after I take out the loan?
A: You may face a margin call — meaning you’ll need to deposit more crypto or cash to maintain the required loan-to-value ratio. Failure to do so could result in partial liquidation of your collateral.
Q: Are crypto-backed mortgages taxable events?
A: Generally, no — because you’re not selling your crypto. However, tax implications vary by jurisdiction. Always consult a qualified tax advisor.
Q: Do I need good credit to qualify for a crypto mortgage?
A: Not necessarily. Platforms like Milo focus on asset value rather than credit history or income verification.
Q: Can I buy any type of property with a crypto-backed loan?
A: Most services currently support residential real estate purchases in the U.S., though some may expand internationally or into commercial properties over time.
Q: Is my cryptocurrency safe when used as collateral?
A: Reputable platforms use cold storage, multi-signature wallets, and insurance mechanisms to protect assets. Always review a lender’s security practices before depositing funds.
Final Thoughts
The ability to use crypto assets as collateral for real estate purchases marks a pivotal moment in financial innovation. While still in its infancy and constrained by volatility and regulation, this model empowers a new generation of digital asset holders to participate in traditional markets without sacrificing their long-term holdings.
As adoption grows and infrastructure matures, we may soon see crypto mortgages become a standard option — not an alternative.
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