Better and Coinbase have made their Bitcoin-backed mortgage product generally available, allowing qualified US buyers to borrow against BTC to fund a cash down payment.
The product combines a conforming Fannie Mae mortgage with a second loan secured by Bitcoin and a second lien on the home.
Tom Lee has joined industry figures and early adopters in backing the product, but critics argue its two-loan structure adds cost to an already expensive purchase.
Tom Lee has joined a growing chorus of crypto industry voices backing Coinbase and Better Mortgage’s push to let Americans use Bitcoin to help buy a home.
However, the growing enthusiasm has not convinced everyone.
While supporters see a way for crypto-rich buyers to purchase property without selling their holdings, critics see a more complicated path to extra debt and a potentially dangerous link between two volatile markets.
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The structure gives an approved buyer two loans at closing.
The first is a conventional mortgage on the property that is designed to meet the Federal National Mortgage Association’s conforming guidelines.
The second funds the buyer’s cash down payment and is secured by both the Bitcoin they pledge and a second lien on the home.
Bitcoin is therefore collateral for the down-payment loan rather than money transferred to the property seller.
Better requires BTC worth 250% of the second loan. A buyer seeking a $100,000 down payment would therefore need to pledge $250,000 in Bitcoin.
Bitcoin is released after the relevant debt is repaid or the mortgage is refinanced.
Crucially, a fall in Bitcoin’s price does not alter the loan terms or force the borrower to provide more collateral. Better says the product has no price-triggered margin calls or automatic liquidations.
However, the company may sell the pledged BTC if the borrower is 60 days behind on payments.
Foreclosure on the home is handled separately and may begin after 180 days of delinquency, according to Better.
The companies claimed the product had already attracted more than $260 million in projected loan demand before becoming generally available.
Tom Lee Joins Growing Chorus Backing Bitcoin Mortgages
Ethereum bull Tom Lee responded on X to the announcement by writing simply: “This is good.”
The brief post puts one of crypto’s most prominent market bulls alongside an expanding group of supporters who see the product as proof that Bitcoin can play a practical role in mainstream finance.
Ben Shen, the exchange’s head of financial services and loyalty products, said the structure would make crypto “more useful and powerful in the real-world.”
Better’s first token-backed mortgage customer, identified as Joe, reportedly said the product enabled him to buy his first home without having to abandon a decade-long Bitcoin position.
“We closed on our home and my Bitcoin stayed intact,” he said.
Coinbase has framed the launch as evidence that on-chain wealth can be used in the real economy,
Selling appreciated BTC can trigger a capital gains tax liability and eliminate the holder’s exposure to any future price increases.
Pledging the asset may avoid an immediate sale while allowing the buyer to unlock some of its value.
Why Critics Aren’t Convinced
Not everyone has been receptive to the concept, with even lawmakers pushing back against the product.
Weaken incentives to continue paying if both BTC and home equity fall
Expose taxpayers to losses
Sean Tuffy, a financial regulation expert, previously told DL News that the arrangement was “not really a Bitcoin mortgage” so much as “a bit of financial engineering.”
Tuffy also questioned how widely useful it would be.
“The irony of products like this is that they only typically make sense for those who probably could afford a house in the first place,” he said.
The collateral requirement illustrates that point.
Someone must hold $250,000 in Bitcoin to borrow $100,000 for a down payment.
This means the product is aimed at buyers with substantial assets but limited cash.
Crypto analyst Tom Dunleavy was more forceful, calling the offering an “absolutely TERRIBLE idea.”
Dunleavy argued that financing the down payment changes the borrower’s risk profile.
He warned that a major Bitcoin decline could leave an overexposed borrower facing pressure to sell crypto or the property, concluding:
“This amplifies BTC liquidation risk materially.”
Consumer advocates have raised similar concerns.
Alys Cohen of the National Consumer Law Center and Corey Frayer of the Consumer Federation of America compared the structure with crisis-era “piggyback” loans.
They warned that combining mortgage debt with volatile crypto collateral could complicate defaults and put borrowers’ home equity at risk.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
