Florida-based research and rating firm Weiss Ratings has issued a warning about the risks of using crypto as collateral for long-term real estate loans. Among the current economic conditions in the United States
The company is particularly focused on Milo, a Miami-based digital banking startup. It offers a 30-year mortgage backed by Bitcoin (BTC), Ethereum (ETH) or stablecoin as collateral. The company does not require a down payment. And the loan interest rate will be between 3.95% and 5.95%.
In a May 3 report, Weiss analyst Jon D. Markman canwarned of such mortgages It cited the poor performance of stocks and cryptos this year. These include the US housing bubble, rising interest rates, and the upcoming Federal Reserve policy change.
“US real estate prices It now faces changes in Fed policy and higher mortgage rates,” he added.
Markman concludes that not every risk in Crypto is bad, but maybe in the real estate sector. before adding that “Whatever the market does The potential for success in cryptocurrency is real.”
Many crypto and stock investors have negatively speculated on the potential market impact of a serious rate hike this year. Because the Fed aims to reduce inflation.
This is because both markets suffer from their performance due to a number of factors. Macro analysts such as Alex Krueger have suggested that the Fed’s latest announcement is scheduled for this week. “will determine the fate of the market” in the future
according to the requirements andconditionMortgage The price of the Secured Crypto Asset “Value can decrease without any consequences as long as it does not drop to 35% of the total loan amount” and to avoid liquidation, users have to top up their margin internally. 48 hours after reaching the minimum percentage While stablecoins can be used during times of market volatility.
Milo raised $17 million in Series A funding in March. And there are plans to develop mortgage products to meet the growing demand. along with increasing the number of employees
However, Markman also expressed concern that “Milo’s bigger plan is to consolidate crypto-backed home loans and offer them bonds to asset managers and insurance companies,” a behavior that drove the housing market crash in 2009.
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