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Sydney fintech company Block Earner has announced what it terms as Australia's first Bitcoin-backed home loan. The new product enables borrowers to secure up to half the value of a property by simply placing their loan under collateral against their Bitcoin assets, without requiring them to sell the cryptocurrency.
Fireblocks, a secure digital asset platform, will hold the crypto assets that serve as collateral for the loans. Borrowers can repay the loans in either fiat or cryptocurrency and have the option to drop a loan at any time with no consequences. The block earner reported a total amount of more than AUD 110 million in early borrower interest, although no official information is available regarding the agreements with traditional lenders.
The mortgage will be an interest-only mortgage for a period of two to four years. The property user would place Bitcoin and may issue a down payment of up to half of the property value, with a regular lender covering the remaining amount. The structure will enable crypto owners to maintain exposure to BTC without incurring a liquidation event or tax consequence.
Block Earner has also set the loan-to-value (LVR) ratio at 60% to mitigate the risk of price fluctuations. According to CEO Charlie Karaboga, in the case that the value of Bitcoin decreases, the company sends out a notice to the borrowers with 30 days to maintain the LVR by using fiat, or new collateral, or new Bitcoin. This cushion will help prevent forced sales, and the house will be protected against the effects of fluctuating prices.
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The Block Earner product launches at an opportune time, when Bitcoin ownership and housing affordability are among the key financial issues in Australia. The company notes that although the fiat home price has been increasing, the average house price in BTC has decreased significantly over time, falling by 21% annually between 2016 and 2024.
Such a movement indicates that long-term stakeholders holding Bitcoin have acquired increased purchasing power. Block Earner considers this model consistent with an emerging trend in which digital assets are connected with traditional finance. The program can also influence the way regulators and financial institutions assess cryptocurrencies in evaluating mortgage eligibility, both in Australia and globally.
