Topic: Using Bitcoin as collateral for real estate - page 2. (Read 2024 times)
Your question made me ask more questions myself. Many of them have been posted already. But yes I'd suspect the volatility of The BTC price would be an issue.
If you are talking about mortgages, the house is the collateral
Lol collateral at low value makes little sense. Also coins would have to be given to lender and then lender maybe give them back and maybe not. Escrow can take some risk but again its tricky 
The price is not a big concern, as a collateral you can use 1/10 of its value if that is the largest retracement of exchange rate during the latest 4 years, actually given a standard deviation based model, you might be able to use 1/4 of its value as collateral
And if it can work as a collateral, it could also be bought with a loan, that will ignite a rally which could be magnitudes higher than those rallies we have seen so far
And if it can work as a collateral, it could also be bought with a loan, that will ignite a rally which could be magnitudes higher than those rallies we have seen so far
It's going to be hard to implement.
Say it's used as a collateral in the current position BTC is in now, which bank would allow it to be used? Due to its volatility I doubt any financial institution would be willing to accept it's use. Besides, even if they would, they'd undervalue it tremendously and ask for a ridiculous amount of BTC in the event that they'd need to liquidate it. BTC is currently defined as an 'asset' and it's 'irregular' in the sense that it fluctuates more than other types of 'assets' such as property, art etc. The bank/financial institution wouldn't accept it as the value of the collateral could become worthless at any stage throughout the duration of the loan.
If the collateral is being backed on a personal loan/sale then I'd assume that'd depend entirely on whether or not the seller/person granting the loan would allow it.
From a legal point of view, I don't see any issues with it though.
Say it's used as a collateral in the current position BTC is in now, which bank would allow it to be used? Due to its volatility I doubt any financial institution would be willing to accept it's use. Besides, even if they would, they'd undervalue it tremendously and ask for a ridiculous amount of BTC in the event that they'd need to liquidate it. BTC is currently defined as an 'asset' and it's 'irregular' in the sense that it fluctuates more than other types of 'assets' such as property, art etc. The bank/financial institution wouldn't accept it as the value of the collateral could become worthless at any stage throughout the duration of the loan.
If the collateral is being backed on a personal loan/sale then I'd assume that'd depend entirely on whether or not the seller/person granting the loan would allow it.
From a legal point of view, I don't see any issues with it though.
Who knows maybe It will happen but as said price must get more stable first. Im' sure BTC is used as collateral not officially.
I'm sure it will happen, but the price will have to be stable first. And that will happen when bitcoin has billions of users, not 2 million with wild volatility.
Otherwise the bank would accept the collateral, the person would fall through, and the bank will find out that the bitcoins are only worth half of what they thought.
Otherwise the bank would accept the collateral, the person would fall through, and the bank will find out that the bitcoins are only worth half of what they thought.
Yes, of course, any asset valuation is discounted because of market volatility or liquidity concerns. But as you hinted, I expect the 'Bitcoin as collateral' story to be a good one in the near future for many banks and real estate firms.
I'm sure it will happen, but the price will have to be stable first. And that will happen when bitcoin has billions of users, not 2 million 1 million with wild volatility.
Otherwise the bank would accept the collateral, the person would fall through, and the bank will find out that the bitcoins are only worth half of what they thought.
Otherwise the bank would accept the collateral, the person would fall through, and the bank will find out that the bitcoins are only worth half of what they thought.
Has there been any news or stories of Bitcoin being used as collateral for a real estate purchase? I know it has been used to make the actual purchase but what about as collateral?
Given the nature of the block chain (ie. public ledger), it would be easy for a real estate entity to confirm a signee's Bitcoin ownership has not changed while still staying in possession/control of the signee.
I think the new US regulation will open up a new world of 'Bitcoin as collateral' and less so as a 'currency' per se.
Given the nature of the block chain (ie. public ledger), it would be easy for a real estate entity to confirm a signee's Bitcoin ownership has not changed while still staying in possession/control of the signee.
I think the new US regulation will open up a new world of 'Bitcoin as collateral' and less so as a 'currency' per se.
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