Better Mortgage and Coinbase launched a crypto-backed mortgage that lets you use Bitcoin as collateral without liquidation risk. If just 1% of the mortgage market adopts it, roughly 717,000 Bitcoin could get locked up right as the halving cuts new supply in half.
The government just created the biggest supply shock in Bitcoin's history on purpose, obviously, because they want to make money, and I am about to get rich off of this. We had Better Mortgage partner up with Coinbase to make the first ever crypto-backed Fannie Mae conforming mortgage. That means you can now pledge your Bitcoin as collateral and get a standard 30-year home loan without selling a single Satoshi, okay? And it's not like coming, like, go sign up on the website right now. It's here. One of the craziest parts about this is that they're guaranteeing no margin calls, meaning if The price goes down, you do not get liquidated, which is insane because that allows you to accumulate Bitcoin forever. So let me explain this in a simple perspective as I possibly can. Right now, the housing market on average returns 3 to 5% a year. If you buy a house for, let's say, $500,000, you got to put 10% down. So that's $50,000 in cash that you have to give the bank for them to loan you the rest. It doesn't seem like a bad deal, but the problem is the housing market only goes up 3 to 5%. So if you have $50,000, You're basically saying I'm a lot like, I only want it to go up 3 to 5%. Now, we're not talking about other things like, you know, you actually building out your house. That's a luxury purchase. I'm talking about pure investment. 3 to 5% year over year is not that good when Bitcoin's returning 400 to 600% over a 4-year period. It's not good at all. This is exactly why people have not been buying houses over the past 20 years. It's been stagnant, right? A lot of millennials do not buy houses anymore because there's so much better opportunities in other areas. Even in the stock market, it returns 12% a year. So if you're tying up that $50 grand, it just doesn't make sense for 3 to 5% until now. So let's say hypothetically you're going for a million-dollar home, you put up $100 grand as a down payment. Instead of putting up the $100 grand, you could put crypto as collateral. You could put Bitcoin, and their collateralization ratio specifically, by the way, is 250%. So you put up $250 grand in Bitcoin, they allow you— you don't have to do a down payment anymore. That money stays in Bitcoin, and if it goes up, you make money on that. And the crazy part about their product is that you cannot get liquidated. They're literally ensuring that you cannot get margin called from the price dropping. That's insane. So that's basically allowing people to accumulate Bitcoin over a very long period of time and get the luxury of buying a home at the same time. Now, what's crazy about this is that we have the supply shock from the Bitcoin halving. But at the same time, if just 1% of the entire mortgage market is locked up in Bitcoin, that's 717,000 Bitcoin. That's more than half of all of the spot ETFs combined. Now, the difference between a spot ETF that happened last January that led to the price going up a lot and what's happening here is that when you put it in a mortgage, you are not selling that Bitcoin for 15 to 30 years. If you're putting a collateral Bitcoin, nobody's going to sell it. With an ETF, they can sell it instantly. And when I say 1% of the mortgage market being captured in Bitcoin, that's extremely conservative considering the fact that we had other banks like JP Morgan come out with pretty much the same product immediately after this happened. Combine that with the fact that the Bitcoin halving is around the corner, which decreases the issuance of Bitcoin in half every 4 years. We are talking about a very severe supply shock. Okay. And when you have lower supply and a lot of demand for something, it goes up in price a lot. You better pay attention to what's going on. The future is being set.
