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Crypto lending space would expand through such steps taking one step ahead of its current state and competing with traditional finance
It’s been heard that a cryptocurrency asset management service provider is set up first of its kind bitcoin-backed mortgage. The fund would cater to the growing demand for solutions on the institutional front for crypto whales that are looking for traditional finance alternatives.
Asset management service platform XBTO Capital plans to finalize creating a multi-million dollar mortgage fund that will serve in Miami in the upcoming weeks. The mortgage would keep bitcoin as the collateral against the loan.
The firm, which started as a trading operation, would require KYC checks and credit scores in order to expand to other business lanes. The advantages for investor clients would include no need to sell bitcoin and raise capital gains.
Head of markets of Miami-based XBTO, Joe Haggenmiller, said that the program would provide the guarantee to those individuals who might not be eligible for such services, for instance, foreign nationals. He further said that they are solving problems for people who are facing issues like not getting an American mortgage or because they are foreigners, and in case you want to buy a fancy apartment without selling your bitcoin. Those who are seeking a mortgage can get a finance amount of up to 90% of their mortgage by providing a 10% down payment in bitcoin for a 15 to 30-year long mortgage.
Haggenmiller said that rates would be competitively comparable to mortgages in traditional finance, although he did not disclose any specific range for this. The idea is to set an exemplary benchmark with heavy mortgages that are taken out for properties and too expensive in traditional loans.
The XBTO head further said that the bitcoin maximalists, who are the old guards for the crypto asset, never ever want to sell their bitcoin. The reason could be their optimism that it could reach up to $1 million, or they don’t want to take a blow of tax hit. They would have kept it in cold storage but didn’t want to give up on it. But this could be the way for them to keep their bitcoin to buy a fancy condo in Miami without losing their authority. However, Milo crypto lender was the first to offer digital asset-backed mortgages in the industry.
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Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
