Coinbase partners with Better to offer mortgages using Bitcoin as collateral, eliminating volatility-induced margin calls.
Borrowers can avoid liquidation during price crashes if they continue making their monthly interest and principal payments.
Steve says the key innovation is a Bitcoin-backed loan where you don't need to add more collateral if the price drops.
The product relies on a conservative 40% loan-to-value ratio, requiring $500k in Bitcoin to secure a $200k loan.
DK argues the real breakthrough is that these loans are designed to be eligible for purchase by Fannie Mae.
Fannie Mae eligibility would bridge volatile digital assets with federal housing infrastructure, shifting systemic risk to the secondary market.
The product targets Bitcoin-rich but cash-poor investors, offering an alternative to paying capital gains tax from a sale.