XBTO, a crypto-currency market-maker, is set to fund its first bitcoin-backed mortgage as an alternative to traditional finance. The company cited growing demand for institutional solutions for digital asset holders looking for alternatives to traditional finance.
XBTO plans to finalize a multi-million-dollar mortgage in Miami with bitcoin as the loan’s collateral. It will be one of the first instances at this scale as the market for crypto-based lending continues to grow. Because of bitcoin’s rapid growth, some analysts expect the cryptocurrency to reach values of over $100,000 in the next one to two years. Because of this, most holders of the digital asset are wary of selling and prefer a buy-and-hold approach instead.
The firm will require know-your-customer checks and credit scores, and clients will not have to sell their bitcoin and incur capital gains prior to completing the transaction. XBTO reported plans to limit bitcoin-backed mortgages to the State of Florida, and to mortgages worth at least $1 million.
The firm is partnering with Columbus Capital, a traditional full-service mortgage lender and servicer, to assist in due diligence and underwriting lien holders.