Bitcoin News Today: Block Earner Launches Australia’s First Bitcoin-Backed Home Loan

Block Earner, a Sydney-based fintech company specializing in crypto yield and payment products, has introduced what it claims to be Australia’s first Bitcoin-backed home loan. This innovative financial product allows Australians to purchase homes without having to sell their Bitcoin holdings. The loan covers up to 50% of a property’s value, with the Bitcoin serving as collateral and held in custody with Fireblocks, a digital asset security platform. Borrowers have the flexibility to make repayments in either cash or crypto and can exit the loan early without incurring penalties.

Charlie Karaboga, CEO and co-founder of Block Earner, emphasized the significance of this product, stating that it represents a turning point in property financing within the digital assets sector. "Crypto holders shouldn’t have to choose between holding Bitcoin and buying a home," Karaboga said. "We're giving them a smarter option, a way to put their crypto to work without giving it up." The model involves users transferring their Bitcoin to a custodian, borrowing up to half the property's value as a deposit, and then obtaining the remaining amount from a traditional lender. The Bitcoin loan is interest-only for up to four years, allowing borrowers to maintain their BTC exposure while avoiding the liquidation and tax implications of selling their crypto assets.

To manage the volatility of Bitcoin, Block Earner has implemented a 60% loan-to-value ratio (LVR), ensuring that the amount borrowed cannot exceed 60% of the value of the Bitcoin put up as collateral. This buffer helps protect against price swings and reduces the risk of forced liquidations. If the price of Bitcoin drops sharply, Block Earner provides borrowers with a 30-day notice to fix the LVR through fiat repayment, collateral repayment, or by topping up their Bitcoin holdings. Within this period, either the customer or the market corrects the LVR, or Block Earner sells a partial amount of BTC to fix it, ensuring that the home is never at risk due to Bitcoin price fluctuations.

Block Earner has reported significant early borrower interest, logging over AUD$110 million (US$72.4 million) during its soft launch. This interest highlights the growing demand for financial products that integrate digital assets with traditional real estate investments. The company's model aligns with broader trends in the global housing market, where regulators are considering the use of crypto as part of mortgage eligibility criteria. Block Earner argues that long-term holders of Bitcoin and gold now have greater purchasing power, even as property prices continue to rise in fiat terms. When measured in Bitcoin, the average Australian home price has fallen from 627 BTC in 2016 to just 4.3 BTC in 2024, indicating that using crypto to access real-world assets is not only viable but also strategically sound. This shift reflects a broader trend where digital assets are increasingly integrated into the real economy, breaking down the silos that have traditionally separated them from traditional financial products.