A new bitcoin (BTC)-backed mortgage product that allows clients to borrow up to 100% of the value of their BTC stack might be launched in the US and Canada within months by digital asset savings and credit start-up Ledn.
The new mortgage product remains in pilot mode for selected clients in Canada for now, but according to the company, it will be made “broadly available” to clients located in the US and Canada in early 2022.
In an announcement today, the company said that it has “a growing waitlist” for the new product, and that it is targeting more than USD 100m in bitcoin-backed mortgage originations by the end of the first quarter of next year.
“Most people that hold extensive wealth in bitcoin still can’t utilize their assets to qualify for a mortgage at a bank,” Adam Reeds, co-founder & CEO at Ledn said.
He added that purchasing a home “should not come at the expense” of investing in bitcoin, and said that the company’s new bitcoin-backed mortgage will give access to financial products “for those who choose to invest outside the mainstream of legacy banks.”
According to Ledn’s website, the new bitcoin mortgage product will allow clients to use their BTC holdings to buy a new property with a loan equal to their BTC holdings. Alternatively, the new product can also be used to refinance a property a client already owns, all without selling any coins.
The product thus differs from common decentralized lending and borrowing services that typically do not allow users to borrow amounts close to 100% of their collateral. Ledn is able to get around this by accepting both the bitcoin and real estate as “join collateral,” the company’s website explained.
Meanwhile, the company also announced today that it has concluded a Series B funding round that brought its valuation to USD 540m.
According to the announcement, the company successfully raised USD 70m in the round, which was led by 10T Holdings, an investment fund managed by the macro investor Dan Tapiero.
The round was also joined by all existing investors, including Coinbase Ventures, White Star Capital, and Kingsway Capital, among others. New investors after the round included Golden Tree Asset Management and Raptor Group and FJ Labs, the company said.
In addition to leading the funding round, 10T Holdings CEO Dan Tapiero will join Ledn’s board of directors.
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