A few days ago I've asked a "wrong" question: What are the pros and cons of buying in cash and remortgaging vs taking a mortgage right from the start?

It wasn't the actual question I wanted to ask.

In the foreseeable future I can internalise opportunity that project I'm co-creating obtains substantial amount of funding via cryptocurrency such as Bitcoin or Ethereum.

Potential investors have already expressed concerns - can you guarantee better ROI than simply holding on to BTC?

My instantaneus reaction was - we will not spend BTC, we will use them as collateral when applying for the mortgage.


Thank you var valuable and insightful comments. I'm pretty convinced that crypto is here to stay, not so sure about the future of "paper" (FIAT) money. I would like to have best of two worlds - mantain value in crypto, while having access to real-world assets.

I spoke with mortgage advisors some time ago, not only I need to have 30% deposit upfront but also a business plan and 3 years of accounting history. Ideally I would like to say - I'm a smart guy, I can figure it out.

I do not understand their motivations - I'm paying 30% upfront and if I fail they'll get a building and 30% for free (maybe they'll treat a building in the books as a burden). I'm a smart guy, I can figure it out - definitely need to lawyer up and connect with people who are more experienced in writing proposals that are accepted by traditional finance.

PS. Started conversation with Bank of England and Financial Conduct Authority about best way moving forward.

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    A mortgage, by definition, is secured by the property bought with the loan. Can you spell out exactly what you plan to do? It sounds to me like you want to borrow against the bitcoin you own. Which may be a question better suited to the Bitcoin.SE than here. – JTP - Apologise to Monica Aug 16 '17 at 20:18
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    The word "mortgage" might be confusing here, since most people associate it with a loan secured by real estate. Maybe you should just say "secured loan". – Nate Eldredge Aug 16 '17 at 21:04
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    For loans secuired by property, lenders tend to prefer collateral which has a stable value, which is pretty much the exact opposite of Bitcoin. This would be more akin to a margin loan, where stocks or other securities are pledged as collateral. However, such loans are subject to being called in at any time, if the value of the collateral falls significantly. Would that suit your investment needs? – Nate Eldredge Aug 16 '17 at 21:06
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    Bitcoin's value will have to stop changing 100% in a month for a while before folks accept it for mortgage loans. – ceejayoz Aug 17 '17 at 17:13
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    You can't possibly think that in the real world "I'm a smart guy, I can figure it out" is valid loan underwriting criteria... – quid Aug 18 '17 at 0:03

This doesn't make any sense.

For the people who ask you this, suggest that they borrow the money to invest with you. They can use their bitcoins as collateral for the loan.

That way, they get the same benefit and your company doesn't go out of business if the price of bitcoin drops, even temporarily, because the loan becomes unsecured.

If they want to try to use a volatile asset as collateral and have to figure out how to cover when the price drops temporarily, great. But why should they put that risk on your other investors who may not be so crazy?

Also, this obviously won't meet the investor's concerns anyway. Say the price of bitcoin goes up but you lose 10% of the money you borrowed. Clearly, your investors can't have an interest that worth as much as they would have if they held bitcoin since you lost 10%.

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