In a landmark move, Sydney-based fintech Block Earner has introduced a new way for Australians to purchase homes using their Bitcoin as collateral, without even having to liquidate their Bitcoin holdings.
The firm claims this is Australia’s first Bitcoin-backed home loan with the ability to purchase real estate using crypto currencies.
How does the loan work?
The loan essentially enables borrowers to use their Bitcoin as collateral to finance up to 50% of a property’s value as a deposit.
It does not require the borrower to sell their cryptocurrency, thereby preserving exposure to potential future gains.
This method also allows borrowers to be exempt from tax implications associated with asset sales.
James Coombes, Block Earner’s co-founder and Chief Commercial Officer said,
“We know that liquidity can be unlocked in a secure manner and help bring these previously excluded Australians into the conversation for traditional assets.”
According to the company, the product is designed for long-term Bitcoin holders who may not appear financially eligible under conventional criteria but hold significant wealth in digital assets.
The Bitcoin used for collateral is held with Fireblocks, a global leader in digital asset custody solutions.
Borrowers can make repayments in either crypto or fiat currency, and unlike traditional loans, Block Earner’s offering comes with no penalties for early exit.
The loan is structured as interest-only for up to four years, further easing entry into the property market.
Charlie Karaboga, CEO and co-founder of Block Earner said, “We’re giving them a smarter option, a way to put their crypto to work without giving it up.”
How will the firm navigate Volatility?
While volatility of Bitcoin remains a key concern, Block Earner has built-in safeguards. The loan is capped at a 60% loan-to-value ratio (LVR).
If the value of Bitcoin collateral drops sharply, borrowers are given a 30-day window to restore the required LVR through fiat payments, topping up collateral, or partial loan repayment.
Karaboga emphasized.
“The home is never at risk with Bitcoin price. If needed, we only sell a portion of the BTC and not the whole position, ensuring clients retain ownership and upside potential.”
Following a soft launch, Block Earner reported over AUD$110 million in early borrower interest, signaling substantial appetite among Australian crypto holders to diversify into real estate without abandoning their digital portfolios.
Australian Regulation
The announcement comes while Australian regulators try to integrate digital assets into mainstream finance.
Block Earner’s innovative model signals to ongoing debates in other jurisdictions, particularly the United States about recognizing crypto assets as part of mortgage eligibility criteria.
As property prices in Australia continue to rise, Block Earner claims that Bitcoin holders now wield greater real purchasing power, noting that the average Australian home price has declined from 627 BTC in 2016 to just 4.3 BTC in 2024.
As more Australians seek ways to diversify and utilize their crypto holdings beyond the screen, products like this may become not just novel but necessary in the near future.