Getting a crypto home loan by using Bitcoin as collateral can be risky. Banks prefer giving loans to individuals with steady income rather than wealthy Bitcoin investors. Crypto home loans work by stashing away Bitcoin as collateral, but if the value of Bitcoin drops too much, it gets liquidated. These loans often require 100% or 200% collateral. Constant monitoring of Bitcoin’s price is necessary, and failure to meet margin calls can lead to instant liquidation. The biggest concern is what happens if Bitcoin’s price drops and additional collateral is required. However, some people find value in crypto home loans, as they can hold onto their Bitcoin and avoid capital gains tax. Companies like Milo offer 30-year crypto mortgages, but caution and due diligence are advised.
- Banks are not interested in giving loans to wealthy Bitcoin investors without steady income.
- Crypto home loans involve using Bitcoin as collateral for a loan, but the risk is high if the value of Bitcoin drops significantly.
- Most crypto collateral loans require 100% or 200% collateral.
- Continuous monitoring of Bitcoin’s price is necessary to meet margin calls and prevent liquidation.
- Bitcoin and Ether are the main cryptocurrencies accepted as collateral, while low market cap and highly volatile tokens are generally not accepted.
- Some individuals have had positive experiences with crypto home loans, allowing them to hold onto their Bitcoin and avoid capital gains tax.
- Companies like Milo offer 30-year crypto mortgages, but caution and due diligence are advised.
This article originally appeared in Cointelegraph. Continue reading...