Bitcoin billionaire Brock Pierce took out a crypto-backed mortgage to buy a $1.2 million home in Amsterdam. Not many of Americans know how knee-deep Pierce is in the cryptocurrency industry.
Pierce who was an early adopter in the space, in 2013, he co-founded VC firm Blockchain Capital (BCC) which had already raised some $85 million in two venture funds by Oct 2017. He was also a large investor in Etherum and supported the early days of Coinbase.
At the height of his success, Pierce was the co-founder of Block.one, the entity behind EOS. He was named by Forbes as one of crypto’s top 20 richest people in February 2018.
Yesterday, the world’s biggest crypto lender Swiss-based NEXO announced that Pierce was their first borrower to back a mortgage using cryptocurrency as collateral last November. NEXO told FOX Business that Pierce was the first person in the world to use his crypto assets to buy real estate.
Antoni Trenchev, co-founder and managing partner at NEXO continued to say:
He backed the entire loan for the house with bitcoin… This was our first-ever crypto-backed mortgage.
It appears that the reason Pierce sought a Bitcoin-backed mortgage for the home is more one of financial astuteness than need.
Die-hard Bitcoin HODLers don’t want to sell their assets. They’re convinced that the bull run will come again–but they need to access fiat in the meantime.
This is why companies like NEXO, BlockFi, Celsius, InLock, and countless others, are finding more customers.
It’s not just the high interest that HODLers can earn on their accounts, but the low-interest loans that are really taking off.
Celsius alone has already initiated over $1 billion worth of crypto loans since June of last year–and it’s an incredibly appealing option. Rather than get a mortgage from a bank, these companies charge as little as 8 or 9 percent interest.
And whale-sized HODLers with dwindling crypto wealth are lapping it up… Pierce reportedly told FOX Business that these types of companies are a bridge between the old world of traditional finance and the brand new frontier that blockchain now enables.
He went on to say:
Being able to borrow against one’s crypto assets gives one options… I was able to hold on to my crypto and settle the transaction in fiat.
One wonders if Bitcoin-backed loans will become a popular way to make major purchases?