How Cryptocurrency Is Redefining Real Estate Financing

• According to the latest data by TripleA, more than 580 million people in the world had adopted cryptocurrencies as of June 2025, with this being mostly taken up by adults 18-34 years of age.
• The UK property market saw average house prices touch £286,000 in early 2025, with many crypto holders still underbanked and lacking the capability to get a mortgage through traditional methods (ONS).

The way people are buying homes has altered slightly, and cryptocurrency could potentially play a much bigger role than many ever expected. Suppose you have Bitcoin or Ethereum; then, your portfolio might be used to qualify for a mortgage, technically with no income or credit history verification required. 

Crypto mortgages are new types of home financing where borrowers may use their digital currency holdings as collateral, rather than converting them into cash. The attraction toward this model is rising at the utmost speed, especially among young, tech-savvy buyers who have been priced out of the traditional means.

What Exactly Is a Crypto Mortgage?

A crypto mortgage essentially allows one to take their cryptocurrency, like Bitcoin or Ethereum, as collateral for the loan, instead of furnishing a cash deposit or basing the loan primarily on one’s income. Methods like these help thereby free up cash against the crypto holdings the borrower holds without having to sell them, which will either attract tax obligations or reduce investment opportunities.

These mortgages are yet to become mainstream, especially in the United Kingdom; however, there are a handful of companies across the expanse who are either offering or developing products in the field.

Why Are Crypto Mortgages Gaining Attention?

There are several factors at play in keeping interest levels up:

• The global crypto investor base is expanding, with millions today holding meaningful digital assets
• The self-employed, as well as the crypto-rich, face difficulties when going through traditional credit checks
• There is a growing degree of acceptance in certain financial platforms toward considering crypto as a legitimate form of wealth.

In markets such as the US, some crypto holders have already begun using their stock as collateral for real estate loans. Companies like Milo and Figure are examples of lenders offering these products, with reports suggesting Coinbase may enter the space as well. UK-based options remain limited, but conversations are underway.

How the Process Works

The process of getting a crypto mortgage is quite different from applying for a traditional home loan:

1. You apply through a lender that accepts crypto collateral.
2. You pledge a specified amount of your crypto, which is then locked in a digital wallet.
3. The lender approves a loan based on the fiat equivalent of your pledged assets.
4. You receive the funds to purchase property, while your crypto remains locked as security.
5. Once you pay off the mortgage, your crypto is released.

This model allows you to retain potential gains from your digital assets while also purchasing a home.

Potential Benefits

Several advantages might appeal to global homebuyers:

• You can retain your crypto holdings without needing to sell them.
• The approval process may be faster and more flexible, especially for those without strong credit histories.
• It opens up new financing possibilities for people working in crypto or freelancing.
• You may avoid triggering capital gains taxes by not selling your crypto.

For example, a crypto investor who bought Ethereum at £200 and now sees it trading above £2,500 might not want to sell and lose potential future gains.

Major Risks to Consider

Still, there are important risks involved:

1. Price Volatility

The value of crypto assets can fluctuate significantly. If the value of your collateral drops sharply, your loan-to-value (LTV) ratio can become dangerously high. This could lead to a margin call or even forced liquidation of your assets.

For instance, Bitcoin dropped from nearly £50,000 in November 2021 to under £16,000 by the end of 2022. Such swings pose real challenges to collateral-backed lending.

2. Lender Regulation and Security

Many crypto lenders are not regulated like banks. This means you have less legal protection if something goes wrong. Always investigate how the lender secures your assets, what happens in the case of a default, and whether the lender is registered with any financial oversight body.

The UK’s Financial Conduct Authority (FCA) has not yet issued guidance specific to crypto mortgages but has warned the public about risks tied to crypto promotions.

What Questions Should You Ask?

Before considering a crypto mortgage, ask yourself:

• Which cryptocurrencies are accepted?
• How much collateral do I need to provide?
• How is the crypto stored and secured?
• What happens if the crypto market crashes?
• Is the lender regulated or insured in any way?
• What are the repayment terms and interest rates?

These questions can help you evaluate whether this path fits your financial goals.

Expert Opinions

Industry experts and regulators remain cautious. In 2025, the US Federal Housing Finance Agency acknowledged risks in crypto-collateralised mortgages but proceeded with a policy to allow Fannie Mae and Freddie Mac to consider crypto assets in mortgage assessments, reflecting a cautious approach.

While proponents argue these loans offer new access points to homeownership, critics point out that price volatility and limited regulation could create instability for both borrowers and lenders.

Alternative Options

If you own crypto but aren’t comfortable with the risks of pledging it as collateral, there are other paths:

• Convert a portion of your crypto into fiat currency and use it as a traditional deposit
• Combine crypto with cash or other assets to strengthen your mortgage application
• Wait for more stable and regulated products to emerge in the market

Some investors choose to cash out during a crypto rally to fund a home purchase, while others hold on and explore hybrid solutions.

Real-World Story: David from Manchester

David, a 32-year-old working in the decentralised finance (DeFi) sector, built up a significant Ethereum portfolio over five years. In early 2024, he used that crypto to secure a mortgage via a US-based lender while working remotely in the UK.

“I didn’t want to sell during a downturn and lose future upside,” he said. “But I still wanted to get on the property ladder in London.”

He now owns a flat and still holds his Ethereum, which remains locked until he finishes repaying the loan. While he views the experience as positive, he acknowledges it isn’t suitable for everyone.

“You need to trust the lender and understand the terms. I wouldn’t recommend it unless you’ve done your research.”

What the Future Might Hold

Looking ahead, the idea of merging crypto and real estate is likely to evolve. With developments in blockchain property records and tokenised real estate, we may soon see:

• Faster property transactions via smart contracts
• Fractional ownership of real estate through tokens
• Global accessibility to housing markets without needing a fiat conversion

Companies in the UK and abroad are already experimenting with blockchain-based property solutions. While widespread adoption may take time, the infrastructure is being built today.

Final Thought

Crypto mortgages are not a passing trend. They represent a shift in how wealth is defined and used in the modern world. While they offer new pathways to property ownership, they also introduce complexities that demand careful planning.

If you’re holding digital assets and eyeing a home purchase, this might be the right time to explore your options. Just make sure you ask the right questions and understand the risks involved.