Bitcoin is making deeper inroads into U.S. household budgets as homebuyers weighed down by high borrowing costs and limited supply seek new ways to raise down payments without selling their digital assets.
On March 26, Better Home & Finance and Coinbase launched a scheme that allows eligible borrowers to pledge Bitcoin or the USD Coin (USDC) stablecoin to take out a standards-compliant mortgage loan while securing another loan as a down payment.
The deal would introduce cryptocurrencies to one of the hottest parts of the U.S. credit system at a time when affordability pressures are already reshaping who can buy homes and when.
The timing is central to the pitch, as Realtor.com’s 2026 report pegs the U.S. housing supply gap at 4.03 million units.
This comes as the average interest rate for a 30-year mortgage recently rose to 7%, while total mortgage applications fell by 10.5% and purchase applications fell by 5.4%. At the same time, first-time buyers make up just 21% of the market, according to the National Association of Realtors’ latest profile.
Against this backdrop, lenders and crypto companies believe that a growing group of prospective buyers have wealth in digital assets but lack the cash liquidity needed to overcome one of the biggest barriers to homeownership.
A new route into the mortgage market
The Coinbase-backed product is aimed at borrowers who want to maintain exposure to the cryptocurrency market rather than liquidating their holdings to raise cash for a down payment.
For many, that decision is more important than market timing. Selling cryptocurrencies could trigger tax bills and force investors to reduce positions they consider long-term.
With this in mind, the structure is structured around two loans at closing. The first is a standard mortgage on real property. The second is a private loan backed by collateralized cryptocurrencies, which is used as cash for the down payment.
Vetter said 15-year and 30-year fixed mortgage options are available, subject to credit approval, and the loan is designed in accordance with Fannie Mae guidelines and the mortgage remains a conforming loan.
That distinction is important. This product is not intended to replace a traditional home loan with a cryptocurrency loan. Instead, it leaves the primary mortgage in its traditional form and wraps a cryptocurrency-backed financing layer around the down payment.
For borrowers using Bitcoin, the initial collateral value must be at least 250% of the loan amount in fiat currency. For borrowers using USDC, the initial collateral value must be at least 125%.
From a practical standpoint, a borrower can pledge $250,000 in Bitcoin to unlock a $100,000 cash down payment loan, or $125,000 in USDC to achieve the same result.
The companies are promoting the deal as a way to maintain ownership of digital assets while gaining access to the housing market. Better says both loans can share the same interest rate and amortization period, creating a single combined monthly payment.
A gap is created due to distortion in the housing.
The product’s appeal is directly tied to a housing market that has become harder to break into, especially for younger buyers.
The median age of first-time homebuyers will reach 40 by 2025, reflecting the combined effects of high mortgage rates, rising home prices and limited inventory, according to the National Association of Realtors.
For households with lower incomes, the pressure is even more severe. The NAHB/Wells Fargo Housing Cost Index for the second quarter of 2025 showed that a typical family would need 36% of their income to pay the mortgage on a median-priced new home. Among low-income households, the proportion exceeded 71%.
These numbers help explain why companies are seeing an opportunity to connect digital assets to home finance. Traditional underwriting relies heavily on documented income, credit history, and cash reserves.
This framework tends to favor households that have already built wealth through home equity, income growth, or long-established financial assets.
At the same time, millions of Americans are building positions in cryptocurrencies. For comparison, about 20% of adults in the United States (that’s 52 million people) own some kind of cryptocurrency, and the majority of them are young people.
The NCA 2025 State of Crypto Holders report confirmed that 67% of token holders are under the age of 45 and 26% have an annual income of less than $75,000.
This gives this product a clear target market. That is, young buyers who have sufficient exposure to cryptocurrencies, but who have limited desire or ability to convert their holdings into cash at the time of purchase.
How cryptocurrency pledges work
The companies are trying to make the product more of a mortgage-compatible financing tool than a volatile cryptocurrency loan.
Borrowers collateralizing Bitcoin or USDC are not subject to margin calls or top-up requirements, even if the market value of the collateral declines.
It is better to say that market movements alone do not cause liquidations. Rather, the companies said the pledged assets are only at risk if the borrower is 60 days behind on payments, a threshold that mirrors the treatment of payment stress in conforming mortgages.
The cryptocurrency is stored for the life of the down payment loan and returned once the obligation is repaid. Borrowers cannot trade while the pledged asset is locked, maintaining ownership but limiting flexibility.
For USDC borrowers, stablecoins can continue to earn rewards, which could help offset mortgage repayment costs and reduce the substantial financing burden for borrowers.
Meanwhile, our broader ambitions extend beyond one mortgage product. Better and Coinbase say they intend to expand the scope of eligible digital assets over time to include tokenized stocks, bonds, and other tokenized real estate assets.
This is a sign that they see their mortgage offering as an early step in bringing on-chain wealth into mainstream consumer finance.
Policy support and political resistance
Meanwhile, the launch comes amid a political climate that is increasingly receptive to cryptocurrencies, but not without resistance.
Fannie Mae’s role and the Federal Housing Finance Agency’s oversight could help make these products more mainstream than previous crypto-linked mortgage products.
Last year, FHFA Secretary Bill Pulte directed Fannie Mae and Freddie Mac to prepare to count cryptocurrencies as assets in mortgage applications, reflecting the Trump administration’s broad support for the digital asset industry.
The policy opening has created room for commercial products built around crypto assets, but has also drawn criticism from lawmakers who see the idea as a new source of risk for housing finance.
Democratic senators led by Elizabeth Warren opposed the proposal, arguing that current policy does not allow federally backed mortgage channels to consider cryptocurrencies unless they are first converted to U.S. dollars and properly documented.
They warned that expanding underwriting standards to include non-convertible virtual currencies could introduce new risks to both the housing market and the broader financial system.
This criticism is at the heart of discussions about products like Better’s.
Proponents see this as a way to convert digital assets into real-world access without forcing borrowers to sell their assets or exit the market. Critics see the danger in bringing a volatile and developing asset class closer to the base of U.S. home lending.
The ultimate outcome may therefore depend on whether crypto-backed mortgages remain a niche tool for wealthy digital asset holders or evolve into a broader financing channel for buyers shut out by traditional down payment hurdles.
