TLDR
- Better and Coinbase launched a mortgage product that allows borrowers to use Bitcoin or USDC as collateral for home deposits.
- The companies said borrowers can avoid selling crypto holdings and, therefore, avoid triggering capital gains taxes.
- The mortgage structure follows Fannie Mae standards and targets crypto holders seeking home financing.
- Better stated, the product will not issue margin calls if Bitcoin declines in value.
- The lender will liquidate pledged crypto only if payment delinquency exceeds 60 days.
Better and Coinbase have launched a mortgage product backed by cryptocurrency collateral tied to Fannie Mae standards. Peter Schiff criticized the structure and warned that it could raise default risks for lenders. The rollout comes as the Bitcoin price shows renewed volatility below $70,000.
Bitcoin-Backed Mortgage Plan Draws Direct Criticism
Better and Coinbase announced a partnership on March 26 to introduce crypto-backed mortgages. The companies said borrowers can pledge Bitcoin or USDC instead of selling assets for deposits. They added that the loans will align with Fannie Mae standards.
Better described itself as the first AI-native mortgage platform. The company said it aims to serve millions of Americans who hold crypto but lack cash savings. It stated that borrowers will not trigger taxes because they will not liquidate holdings.
The firms explained that the product avoids margin calls if Bitcoin declines. They said lenders would liquidate collateral only after 60 days of payment delinquency. They framed the plan as a way to unlock housing access for crypto holders.
Peter Schiff challenged the structure in posts on X. He wrote, “Allowing homebuyers to pledge Bitcoin as a down payment on a mortgage is a horrible idea.” He added that the model “substantially increases the risk for lenders.”
Allowing homebuyers to pledge Bitcoin as a down payment on a mortgage is a horrible idea, as it substantially increases the risk for lenders. If Bitcoin crashes, the down payment vanishes. That increases both the likelihood of default and the loss to the lender in foreclosure.
— Peter Schiff (@PeterSchiff) March 26, 2026
Schiff argued that lenders cannot sell the pledged Bitcoin unless borrowers default. He said, “If Bitcoin crashes, the down payment vanishes.” He later called the structure “a scam to keep people from selling their Bitcoin to buy houses.”
Bitcoin Price Volatility Adds Context to Debate
The Bitcoin price fell below $70,000 and moved toward $69,000 during recent trading sessions. Market data showed a drop of over 2% in 24 hours and nearly 3% in seven days. However, the 30-day chart showed a gain of almost 6%.
Ethereum also declined and slipped below $2,100 during the same period. Broader market weakness pressured major digital assets. Bitcoin remained more than 45% below its October 2025 all-time high.
Some analysts described the current phase as short-term holder capitulation. Michaël van de Poppe said that such periods often align with longer accumulation cycles. He pointed to weak hands exiting the market during downturns.
Better and Coinbase launched the mortgage plan during this period of price swings. The companies maintained that borrowers can retain exposure to digital assets. Schiff maintained that tying housing finance to volatile collateral could heighten lender exposure.
