Cryptocurrency is crossing another mainstream threshold: financing home purchases without forcing sellers to liquidate digital assets. Specialized lenders have begun offering loans secured directly by crypto holdings, letting buyers use Bitcoin, Ethereum and similar assets as collateral while keeping their portfolio exposure intact.

The mechanics are straightforward in principle. A borrower posts cryptocurrency with the lender or a custodian; the lender then advances cash to purchase the property, in some cases covering the full purchase price. That structure lets owners avoid realizing gains that would trigger capital gains taxes and preserves the long-term upside of a concentrated crypto position. Some early adopters—people who accumulated during crypto’s early cycles—hold balances worth millions, making this product attractive for high-net-worth crypto-native buyers. Milo, one of the visible entrants in this space, markets loans that can finance 100% of a home purchase using crypto collateral (reporting on Milo’s product here: https://candysdirt.com/2025/12/12/have-bitcoin-now-you-can-finance-a-home-with-cryptocurrency-mortgage-lender-milo/).

Underwriting and risk management differ from traditional mortgages. Conventional lenders rely on verified income, employment history and conservative debt-to-income measures; crypto-backed lenders instead focus on collateral quality, custody security, and volatility exposure. To manage price swings, lenders typically set loan-to-value (LTV) ratios lower than the nominal collateral value or build in dynamic margin triggers that require borrowers to post more collateral or repay if crypto prices fall. Other mitigation techniques include time-locked collateral, third-party hedges, and rapid liquidation protocols to protect the lender’s position.

Pricing will reflect those additional risks. Expect higher spreads compared to standard conforming mortgages: lenders price in volatility, the operational costs of secure custody, and the governance overhead of managing liquidations. Borrowers accept those costs in exchange for tax deferral, retained upside and the ability to transact without converting to fiat. From a balance-sheet perspective, lenders that specialize in crypto-backed mortgages need robust custody partnerships, automated monitoring systems, and legal frameworks to enforce pledges of digital assets across jurisdictions.

Adoption faces several frictions beyond pricing. Tax treatment depends on whether the borrower actually disposes of crypto; while avoiding a sale defers capital gains, regulators and tax authorities may scrutinize structures that effectively transfer economic exposure without a taxable event. Title, escrow and settlement processes also need integration with crypto custody and transfer protocols. Anti-money-laundering and know-your-customer compliance become more complex when collateral consists of pseudonymous assets, and custody providers are a critical part of the trust equation.

Macro implications are worth watching. If crypto-backed lending scales, it could unlock liquidity for holders who otherwise hesitate to sell, potentially increasing transaction volumes in both real estate and crypto markets. Lenders could securitize pools of these loans over time, although rotation into capital markets would require standardized documentation and predictable collateral behavior. Crypto-native token designs that produce disciplined liquidity patterns have conceptual relevance here: for example, tokens that implement fixed-price entry and short, predefined holding cycles can reduce immediate sell-pressure and make collateral profiles more predictable. That tokenomic logic—where behavior is engineered to limit sudden outflows—illustrates one approach