Binance founder Changpeng Zhao stated that the value of 0.1 Bitcoin may surpass the average US home price due to changes in mortgage policies.
Roadmap to Bitcoin-Backed Mortgages
On June 26th, FHFA Director William J. Pulte outlined conditions under which borrowers could present Bitcoin as financial reserves. Key requirements include holding assets on US-regulated exchanges, documenting ownership, and considering price volatility deductions. If approved, the regulation would introduce a new credit scoring layer, expanding mortgage accessibility for individuals with Bitcoin savings.
The New American Dream: 0.1 Bitcoin
In a statement on X, Changpeng Zhao correlated the future 'American Dream' with owning 0.1 Bitcoin rather than a house. The limited supply of Bitcoin combined with increasing institutional demand presents an optimistic outlook for long-term investors. Zhao’s remarks resonated widely within the community, with proponents underscoring the inevitability of governmental agencies recognizing cryptocurrency as collateral.
Challenges and Risks of Crypto Mortgages
Conversely, some analysts recall post-2008 housing finance defaults, warning that crypto-backed mortgages could introduce new vulnerabilities. Critics highlight Fannie Mae’s historical burden of absorbing borrowers’ payments, suggesting that these could reflect on balance sheets during the August-October period. They posit that Pulte’s proposal is a bid to invigorate the market. Still, if the regulation becomes law, it’s seen as inevitable that Bitcoin will secure various uses in mainstream finance.
The FHFA's proposal to utilize Bitcoin in mortgage applications could be a significant step towards recognizing cryptocurrencies in traditional finance, along with the risks it may entail.
