Bitcoin-backed loans enable real estate purchases without capital gains taxes
- Bitcoin holders are using crypto-backed loans to buy real estate without selling their Bitcoin, avoiding capital gains taxes.
- Borrowers typically lock up Bitcoin at a loan-to-value ratio of around 50% and receive fiat or stablecoins, with an average funding time of about 9.6 hours.
- Ledn issued over $300 million in retail loans in the first quarter of the year and is expected to surpass $1 billion by year-end.
- Clients earned eight times more from Bitcoin’s appreciation than they paid in interest in the previous year, withdrawing over 1,000 BTC as excess collateral when prices rose.
The trend of using Bitcoin-backed loans for real estate is gaining traction among crypto-rich individuals who prefer not to sell their assets due to tax implications and potential future value increases. This model allows them to access liquidity for property purchases while maintaining exposure to Bitcoin’s market performance.
The flexibility and speed offered by these loans make them attractive, especially as borrowers can repay anytime without penalties if the loan-to-value ratio remains favorable. This approach has seen notable adoption across Latin America, the US, and parts of Europe as more high-net-worth individuals leverage their holdings for tangible assets like real estate.( Source)
