From BTC vs Real Estate Dualism to Dual Collateralization
Bitcoin is a hard asset like Real Estate, but endowed with additional cyber properties that make it a superior asset class, such as being liquid and global.
While Bitcoin is designed specifically to provide a saving technology and the best hard money ever to make it work, Real Estate is designed for living and has become a store of value as an alternative to devalued Fiat currencies.
Since only a small but rapidly growing portion of the world has already understood this, bitcoin is set to keep on outperforming the legacy asset classes and divert capital toward itself, potentially lowering the monetary premium of Real Estate.
Trend of the average housing price in the United States, in USD versus BTC.
Materializing bitcoin value without selling
Despite the unbeatable upside that BTC offers when held long-term, it's human, and even rational, to want to turn the value stored on the Timechain into quality time off-chain, in the physical world.
Owning a home is one way to materialize self-sovereignty by customizing and independently managing our living space.
Your Home, Your Coins.
You don't necessarily have to choose between the two asset classes, you can combine them as collateral to:
- Buy a home by securing a mortgage collateralized by both your BTC and the new property.
- Unlock your home equity to buy BTC.
If you are already a property owner, with or without an existing mortgage, thanks to a Home Equity Line of Credit (HELOC), you can collateralize the inactive home equity to buy BTC, adding it as collateral to accelerating your mortgage payoff, or just to start/increase exposure to BTC upside.
Home equity
Thanks to HELOC, smart wealth-building strategies can be implemented, with several benefits:
Compared to a second mortgage, a HELOC does not necessarily require monthly payments, does not have a rigid predetermined duration, does not have high activation costs, and, being a revolving line of credit, the capital can be re-borrowed and rolled over based on personal planning and needs.
Homeowners typically have over 70% of their net worth tied to their primary residence. Using a HELOC allows them to avoid concentrating their wealth in a single physical property by diversifying into Bitcoin, as a digital and global asset.
Completing the purchase of a home requires increasingly longer times; however, the portion of the mortgage already paid constitutes equity that can be used to participate in the bitcoin upside while continuing to finance one’s home, potentially increasing liquid wealth.
Individuals and families can become debt-free faster if they use the appreciation of BTC to make an early repayment of the mortgage.
Houses are considered a store of value that protects against inflation, but if this value is inaccessible, it is virtual wealth that does not offset the loss of purchasing power of one's income in fiat currency. Bitcoin was specifically designed to reverse the debasement of Fiat currencies and empower saving again, and it is spendable in fractions, being natively liquid and digital.
By integrating BTC into financing, RE developers/investors can increase credit power to launch more projects, preserve the quality of building development, and gain a competitive edge.
The First HELOC combined with BTC is coming
Coinlateral is building partnerships to enable the first HELOC (Home Equity Line of Credit) combined with BTC on the European markets.
Unlocking Home Equity is an opportunity unknown to most homeowners, and even to those who would like to become one, such as younger people, many of whom find it impossible to afford both a house and to allocate capital to bitcoin at the same time. But the house is capital, which HELOC makes possible to access by turning a portion of equity into liquid funds to allocate to a complementary asset like BTC.
Stay updated on developments in the Bitcoin and Real Estate financing:
The market of financial products integrating Bitcoin and Real Estate is in its earliest phase, and Coinlateral aims to become a reference point for providing insights and contributing to its development.
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