Florida-based ratings and research firm Weiss Ratings has fired out a warning over the risks of crypto mortgages amid the current economic climate in the United States.
The company paid particular focus to Milo, a digital banking startup from Miami that offers 30-year mortgages backed by Bitcoin (BTC), Ethereum (ETH), or stablecoins as collateral. The firm requires zero down payments, and its loan rates vary between 3.95% and 5.95%.
In the May 3 report, Weiss analyst Jon D. Markman urged caution with such mortgages, citing the poor performance of stocks and crypto this year, a U.S. housing bubble, rising interest rates, and the Federal Reserve’s upcoming policy changes.
“The product seems to be like a win-win, assuming real estate and crypto prices keep rising … except there are signs both bets are unlikely to be winners in the near term. Bitcoin is off by 40% since it reached $66,000 in November 2021.”
“And U.S. property prices now face headwinds from a change in Fed policy and rising mortgage rates,” he added.
Markman did conclude that not all crypto risk is bad, but it could be in the property sector, before adding “no matter what the markets are doing, the potential to succeed in cryptocurrencies is real.”
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