Crypto Mortgages: Better.com Allows Bitcoin as Collateral – But with High Risk

Better.com is making headlines again, this time with a truly unconventional move: the U.S. real estate platform is now allowing customers to use Bitcoin as collateral for traditional mortgages. At first glance, it sounds like science fiction, doesn’t it? Yet, the idea isn’t entirely far-fetched—at least not initially.
However, those who choose this route must be prepared to dig deep into their pockets: for a $100,000 loan, at least $250,000 in Bitcoin is required. Yes, you read that correctly. And yes, that’s a significant amount. But why take such a risk in the first place? Simply put: many Bitcoin investors have seen their digital assets grow substantially in recent years—and they don’t want to sell them to avoid taxes or to continue benefiting from potential price increases.
Imagine buying Bitcoin years ago for $50,000, and today it’s worth $250,000. Instead of selling and paying taxes on the gains, you could now take out a $100,000 loan—backed by your Bitcoin, of course. According to Better.com, the interest rates may even be lower than standard unsecured loan rates. At first glance, it sounds like a dream, doesn’t it?
But wait—there’s a catch. Bitcoin is notorious for its extreme volatility. A sudden price drop could mean that the collateral suddenly no longer covers the loan. Better.com has implemented mechanisms to address sharp fluctuations, such as requiring additional collateral or partial repayment of the loan. But in the worst-case scenario, Coinbase—acting as the partner—could simply sell the Bitcoin to cover the debt. And none of us want to experience that.
Financial expert Markus Miller warns against this model, calling it an "experiment with high risk." "Cryptocurrencies are not stable collateral.



A Bitcoin crash could quickly lead to a dangerous downward spiral," he says. And he’s not entirely wrong. The market’s volatility is real—and anyone using their wealth as collateral should seriously ask themselves if they can shoulder the risk.
But market crashes aren’t the only risks tied to this model. There are also tax and legal hurdles to consider. In the U.S., taking out a loan against Bitcoin isn’t a taxable event—unlike selling the cryptocurrency. However, in Germany or other countries, the situation is entirely different. The legal landscape is unclear, and such a model would likely be difficult to implement at this time.
Still, Better.com and Coinbase see their pilot project as a first step toward greater integration of cryptocurrencies into traditional financial products. "We believe digital assets will play a larger role in the financial system in the future," Better.com states. Whether the model will catch on remains uncertain. So far, there are few imitators, and most banks, wary of volatility and legal uncertainties, are staying away.
For Bitcoin investors, the offering could still be appealing—provided they’re willing to take the high risk. Those who believe in long-term price increases and don’t want to sell their Bitcoin could access low-interest loans without paying taxes. But those betting on falling prices could quickly find themselves in a financial bind.
At the end of the day, one question remains: Is this a forward-looking model—or just an expensive experiment? One thing is certain: anyone venturing into this should be fully aware of the dangers and ideally only use money they can afford to lose. Because in the world of cryptocurrencies, one thing is always guaranteed: nothing is guaranteed.