Bitcoin Mortgage: A $6.6 Trillion New Blue Ocean

On May 27, Cantor Fitzgerald launched a $2 billion Bitcoin collateral loan program for institutional clients, with the first trading partners including cryptocurrency companies FalconX Ltd. and Maple Finance. As one of the official underwriters of U.S. Treasury bonds, the entry of this century-old Wall Street institution is seen as a highly symbolic breakthrough.

Bitcoin is transitioning from a store of value to a financial instrument that can impact the credit system.

A month later, the Director of the Federal Housing Finance Agency, Bill Pulte, sent out a major signal. He requested that Fannie Mae and Freddie Mac, the two pillars of U.S. housing credit, study the feasibility of incorporating Bitcoin and other cryptocurrencies into the mortgage assessment system. This statement triggered a sharp market reaction, with Bitcoin's price rising nearly 2.87% within 24 hours, breaking through $108,000 again.

As the soul-searching question posed in the Coinbase advertisement states: "In 2012, you needed 30,000 Bitcoins to buy a house, and now you only need 5. If housing prices have been declining in Bitcoin terms, then why have they been rising in USD terms?" What impact will this Bitcoin mortgage have on the USD system?

Does Bill Pulte's word count?

Pulte publicly urged Fannie Mae and Freddie Mac on social media to be prepared. These two companies are the core "market makers" in the U.S. housing credit market, ensuring liquidity and sustainability in the loan market by acquiring mortgages issued by private institutions.

The Federal Housing Finance Agency is responsible for supervising these two institutions. As of December 2024, Fannie Mae and Freddie Mac have guaranteed a total of $6.6 trillion in agency mortgage-backed securities, accounting for 50% of all outstanding mortgage debt in the United States.

Pulte uses a commanding tone because he holds a supervisory board position in both companies as the chairman of the FHFA. After taking office, he implemented extensive personnel and structural reforms, relocating several directors from the two major institutions, appointing himself as chairman of the board, and dismissing 14 executives for a complete reorganization. This significantly enhanced the FHFA's control over government-sponsored enterprises.

Pulte's personal background adds a complex meaning to this news. He is the head of the third largest residential construction company in the United States and is also one of the federal officials among Trump's confidants who publicly supported cryptocurrency early on. He has invested in high-volatility assets such as GameStop and Marathon Digital, aligning more closely with the "Degen" image in terms of investment.

Disagreements within the government

There are obvious divisions within the government. The U.S. Department of Housing and Urban Development is also exploring the use of stablecoins and blockchain technology to track federal housing subsidy funds, but has faced internal opposition. Some officials believe this could trigger a crisis similar to the subprime mortgage crisis of 2008, even calling it "like giving out money with Monopoly money."

Currently, some platforms have offered mortgage products secured by Bitcoin. However, due to the inability to securitize loans and sell them to Freddie Mac and Fannie Mae, loan interest rates remain high and liquidity is restricted. Once Bitcoin is included in the federal mortgage underwriting system, it will not only lower borrowing rates but also mean that holders can leverage effects, shifting from "HODL" to "building family asset allocation in the U.S.".

Of course, the risks cannot be ignored. As former SEC officials have warned, once unstable crypto assets are introduced into the $13 trillion mortgage system backed by the FHA, any decoupling event in market value could bring about systemic shocks.

The core of this divergence lies in whether the United States is ready to officially incorporate Bitcoin into the public financial system as an "alternative investment." The FHFA's research direction is to allow holders to directly use their Bitcoin balances to meet down payment or reserve requirements, which has profound implications as it is the first time decentralized assets can exhibit a "housing leverage" effect. On the other hand, the volatility of crypto assets inherently presents challenges in valuation and risk provisioning when used as "reserve assets."

What does the new FHFA directive stipulate?

Decision No. 2025-360 requires Fannie Mae and Freddie Mac to consider cryptocurrency as an effective asset for borrowers' wealth diversification. The directive requires both institutions to develop proposals to incorporate cryptocurrency into the borrower reserves in their single-family mortgage risk assessments. Additionally, the directive stipulates that companies should directly calculate cryptocurrency holdings without having to convert them into US dollars.

The FHFA has established clear "guidelines" on which cryptocurrencies meet the eligibility criteria. Only assets issued on centralized exchanges regulated in the United States and fully compliant with relevant laws qualify. Additionally, companies must incorporate risk mitigation measures in their assessments, including adjustments based on known cryptocurrency market volatility and appropriate risk reductions based on the proportion of cryptocurrency reserves held by borrowers.

Before any changes are implemented, enterprises must submit their proposals for approval by their respective boards of directors. After board approval, the proposals must be forwarded to the FHFA for review and final authorization. The FHFA's decision aligns with the federal government's broader approach to recognizing cryptocurrency in financial processes, reflecting its commitment to positioning the United States as a leading jurisdiction for cryptocurrency development.

What does this actually mean?

When Bitcoin can truly be certified as an asset for US collateral loans, its "influence" may be no less than the power of the "Bitcoin Reserve Act" proposed before Trump's presidency. This impact will not be limited to a single group; various groups including the American public, financial institutions, and government departments will be affected.

How many Americans will use Bitcoin to "buy a house"? How much can be "saved" by using Bitcoin as an intermediary?

According to reports, about 28% of American adults ( approximately 65 million ) hold cryptocurrencies, with Gen Z and millennials having a notably high proportion, as more than half of them own or have owned crypto assets. As millennials and Gen Z occupy an increasingly large share of the U.S. real estate market, crypto assets may also become more popular as a method of payment for home purchases.

According to the survey, the group of people who "sell cryptocurrency to buy a house" gradually increased from 2019 to 2021, reaching nearly 12% by the end of 2021. Four years have passed, and with the popularity of cryptocurrency, this proportion may have further increased.

As for how much money can be saved, one assumption is: you purchased Bitcoin worth $50,000 in 2017. By 2025, its value reaches $500,000. Instead of selling the Bitcoin and paying $90,000 in capital gains tax, it’s better to work with a cryptocurrency mortgage institution, where you pledge $300,000 of BTC to obtain a $300,000 mortgage at an interest rate of 9.25%. You still own the Bitcoin, and you only need to pay about $27,000 in interest each year, saving the $90,000 in taxes, while also benefiting from the upward price trend of BTC and the hedge against inflation.

Currently, some private institutions are able to provide Bitcoin loan services with an LTV of around 50% and an annual interest rate of 9-10%, while some native BTC ecosystem lending platforms can reduce the annual interest rate to 3.5% if the LTV is 33%. If calculated this way, based on a $500,000 mortgage with a 15-year term, approximately $1,000 can be saved monthly, resulting in a total interest reduction of $190,000.

Tools to Facilitate the GSE Privatization Process

The open Bitcoin mortgage lending mechanism provides an indirect but important support path for government-funded enterprise privatization. It not only introduces diversified types of collateral into the housing finance system but may also create space for the de-governmentalization reforms of Fannie Mae and Freddie Mac from multiple dimensions, including risk transfer, capital formation, regulatory restructuring, and political coordination.

The legalization of the Bitcoin mortgage loan mechanism provides another policy option: as the government withdraws from direct guarantees, the market can provide alternative financing support through technology, asset, and risk-sharing mechanisms. This logic not only helps balance public opinion but also provides policymakers with more flexible bargaining chips in reducing government debt while maintaining stability in housing finance.

How much "pressure" can Bitcoin relieve on mortgages?

As of now, the total market capitalization of Bitcoin is approximately $2.1 trillion, which is about 17% of the U.S. housing mortgage market. If all Bitcoin market value were allowed to participate in mortgage-backed support, then the $2.1 trillion BTC market could support $1.05 trillion in loan principal ( at 50% LTV ), accounting for about 8-9% of the existing housing loan stock. If only 50% of the acceptable portion is taken as collateral, it could still support $525 billion in loan principal, accounting for 4-5%.

Therefore, if Bitcoin mortgages are institutionalized, it will not only have far-reaching implications for the crypto community but also release unprecedented asset conversion power to traditional finance, opening up a positive cycle that can release the purchasing power of BTC without destroying the existing financial system. This means that if policies are fully implemented, Bitcoin loans could provide hundreds of billions of dollars in new financing power for the housing market, which is more than 100 times the current crypto mortgage market.

What are the projects that "land on the beach" in the free market?

( Lending Institution

1. Milo Credit: The first provider of mortgage products backed by cryptocurrency in the United States. It allows users to use digital assets such as Bitcoin, Ethereum, or USDC as collateral, with no cash down payment required, to obtain a loan amount of up to 100% of the property value.

2. Ledn: Headquartered in Canada, it is known for its "Bitcoin-backed loans" and has become one of the world's first crypto-native platforms to explore on-chain asset lending structured products.

3. Moon Mortgage: A loan platform aimed at crypto-native users, focusing on providing "mortgage Bitcoin to buy a house" services for Web3 entrepreneurs, DAO members, and crypto investors without traditional credit history.

4. People's Reserve: Committed to creating a mortgage and credit system centered around Bitcoin. Developing various "Bitcoin-driven" financial products, including self-repaying mortgages and lending tools for exchanging home equity for Bitcoin liquidity.

) Infrastructure

Beeline Title: A blockchain service company dedicated to building property registration and digital custody infrastructure for crypto mortgages. Focused on digitizing the property registration process and integrating it with crypto asset custody mechanisms, thereby achieving fully on-chain, paperless property ownership registration and debt management.

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Can Bitcoin Change the "Old Rules"?

From a century-old brokerage on Wall Street to the Federal Housing Finance Agency, from Trump's public statements to the restructuring of the capital structure in the real estate industry, a financial order centered around Bitcoin is emerging.