Block Earner, a Sydney-based fintech, just dropped a bombshell in the world of property financing. They're offering Aussies a way to buy homes without selling their beloved Bitcoin. Yes, you read that right, no need to part with your crypto to get a home loan.
Here’s the deal: Block Earner is rolling out Australia’s first-ever Bitcoin-backed home loan. Essentially, they’re offering up to 50% of a property’s value as a deposit loan, secured by your Bitcoin. Now, that’s a pretty clever way to make your crypto work for you without letting go of it. And to sweeten the deal, the crypto is held securely by Fireblocks, a digital asset security platform.
Repayments? You can pay in either cash or crypto. Plus, borrowers can exit the loan early without getting slapped with any penalties.
James Coombes, Block Earner’s co-founder and chief commercial officer, puts it this way:
"We know that liquidity can be unlocked in a secure manner and help bring these previously excluded Australians into the conversation for traditional assets. Their 'readiness' is now; they just don't look it."
Yeah, James, I think you’re onto something there.
How Block Earner’s Model Works
Charlie Karaboga, the CEO and co-founder, sees this as a game-changer for property financing in the digital assets sector. And who could blame him? He says:
"We’re giving them a smarter option, a way to put their crypto to work without giving it up."
Now that’s some financial wizardry right there!
The model is pretty straightforward: transfer your Bitcoin to a custodian, borrow up to half the property’s value as a deposit, and then get the rest from a traditional lender. And to make things even better, the Bitcoin loan is interest-only for up to four years. I think this is where Block Earner might be onto something really special, borrowers get to keep their BTC exposure without having to worry about selling and facing those nasty tax implications.
But what about Bitcoin’s volatility, you ask? Well, they’ve got that covered too. The loan is capped at a 60% loan-to-value ratio (LVR), meaning you can’t borrow more than 60% of the value of your Bitcoin. If the price of Bitcoin drops significantly, Block Earner will give you a 30-day notice to fix the LVR either through fiat repayment, adding more collateral, or topping up with Bitcoin.
Karaboga explains it pretty clearly:
"Within this 30-day period, either the customer or the market corrects the LVR, or Block Earner only sells partial BTC to fix it. The home is never at risk with Bitcoin price."
I think that’s a pretty solid way to handle Bitcoin’s volatility, don’t you?
And guess what? Block Earner claims it’s already seen AUD$110 million (around US$72.4 million) in early borrower interest during its soft launch. That’s some serious traction, if you ask me!
It seems like Block Earner is following some bold moves from the U.S. housing market, where regulators are debating whether crypto can be considered for mortgage eligibility. Meanwhile, in Australia, Block Earner claims that long-term Bitcoin holders now have greater purchasing power, even as property prices continue to rise in fiat terms.
In fact, when measured in Bitcoin, the average Australian home price has plummeted from 627 BTC in 2016 to just 4.3 BTC in 2024. If that’s not proof that Bitcoin outpaces inflation, I don’t know what is.
In my opinion, if Bitcoin keeps outperforming inflation while property prices simply follow suit, using crypto to access real-world assets isn’t just smart, it’s a strategic move. It’s all part of the shift where digital assets aren’t just sitting in their own little world; they’re becoming a vital part of the real economy.
Abimbola Adu
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