Coin WorldSaturday, Jun 28, 2025 9:15 pm ET

3min read

In a significant policy shift, the U.S. housing sector is considering the inclusion of Bitcoin and Ethereum in mortgage reserve requirements. This move, endorsed by Cathie Wood, CEO of Ark Invest, aims to leverage the transparency and liquidity of these cryptocurrencies to stabilize mortgage securities. The integration of digital assets held on regulated exchanges, with specific volatility protection measures, marks a historic departure from previous rules that excluded crypto from federal mortgage programs.

Cathie Wood supports this policy change, viewing Bitcoin as a form of financial security. She notes, "Bitcoin is an insurance policy against excesses in fiscal and monetary policy." Industry experts also highlight the transparency and liquidity of Bitcoin, making it an ideal candidate for such uses. This policy evolution aligns with past shifts in regulatory stances, paving the way for future financial integration.

The inclusion of Bitcoin and Ethereum as mortgage collateral could reshape the dynamics of the housing market. It allows for greater access for crypto holders, potentially increasing institutional investment in real estate and stabilizing the market during economic fluctuations. This shift could lead to a broader housing market access for those who hold these digital assets, thereby broadening the pool of potential homeowners.

Michael Saylor, the executive chairman of MicroStrategy, has proposed using Bitcoin as collateral for real estate mortgages. This idea challenges the traditional banking system, which has historically excluded cryptocurrencies from mortgage eligibility. Saylor's vision involves leveraging Bitcoin's value to secure loans, potentially opening up new avenues for homeownership and investment. He engaged with the Federal Housing Finance Agency (FHFA) Director William Pulte to explore the feasibility of Bitcoin-backed mortgages, signaling a potential shift in mortgage qualification criteria.

At a recent event, Saylor and Blockstream CEO Adam Back unveiled a bold vision for the next phase of Bitcoin finance. They proposed creating scalable, credit-based financial products that go beyond equity offerings. Saylor argued that while equity has helped fund Bitcoin accumulation, the real breakthrough lies in issuing fixed-income instruments backed by Bitcoin. These instruments could offer yields of 6-10%, capturing spreads via Bitcoin appreciation. According to Saylor, as long as Bitcoin returns 20% or more, these instruments could be sold and swapped into 20-40% returns. Adam Back provided the technical foundation for this strategy, introducing the "months to cover" metric, which tracks how quickly firms can recoup capital invested in premium securities via Bitcoin appreciation. Back also teased the concept of tokenized equity markets on Bitcoin sidechains, enabling 24/7 Bitcoin-denominated trading of treasury company shares without fiat currency conversions. This innovation could unlock global participation in the Bitcoin market.

MicroStrategy has already laid the groundwork with two preferred stock products: Strike and Strife. Strike offers an 8% dividend plus 40% upside exposure for growth-focused investors, while Strife delivers a 10% fixed yield with senior liquidation rights for retirees seeking stable income and low Bitcoin volatility. Both products are backed by Bitcoin collateral, positioning them as stronger than traditional corporate bonds. Saylor encouraged other companies to follow suit, stating that the more Bitcoin-backed credit products exist, the more the market will be legitimized. He envisions a future where dozens of companies issue Bitcoin-backed credit, accelerating the financialization of Bitcoin and transforming global credit markets. This shift could position Bitcoin as a disruptive force in the financial industry, challenging traditional collateral requirements and opening up new opportunities for investment and homeownership.

Despite its appeal, the road to widespread Bitcoin-backed mortgages is far from smooth. Volatility remains a key concern. Bitcoin’s price fluctuations pose a serious risk to lenders, if the collateral loses value rapidly, it could leave the loan under-secured. To address this, proposed mortgage structures would likely require overcollateralization, where borrowers pledge more BTC than the value of the home. Dynamic margin calls, similar to those used in crypto lending platforms, could also become part of the process. Moreover, legal infrastructure is still lacking. Real estate and mortgage laws vary significantly across jurisdictions, and very few regulators have provided frameworks for using crypto as mortgage collateral. Still, progress is being made. Some fintech companies in the U.S. and Latin America have already started piloting Bitcoin-secured loans for real estate transactions.

Proponents argue that Bitcoin mortgages could democratize home ownership, especially among younger generations who are more likely to hold crypto than traditional assets. It may also benefit property markets in developing economies where access to stable local currencies and traditional banking is limited. Critics, however, warn of financial instability. Tying essential assets like housing to highly volatile markets introduces systemic risks that have yet to be fully understood. Whether Bitcoin mortgages become mainstream or remain a niche option, the conversation itself is significant. It reflects a shift in how institutions and individuals are beginning to view crypto, not just as an investment, but as usable, bankable value. As the financial world evolves, Bitcoin could be holding the key to your next front door.