Block Earner Launches Bitcoin-Backed Home Loans in Australia

A Sydney-based fintech company, Block Earner, has initiated Australia’s first Bitcoin-backed home loan program, enabling borrowers to use their cryptocurrency holdings towards a property deposit.

Loan Structure

The loan covers up to 50% of a property’s value.
Borrowers commit their Bitcoin to a third-party custodian, specifically Fireblocks.
Repayments are flexible, allowing cash or crypto, and no early repayment penalties are applied.
The Bitcoin is held as collateral, effectively allowing users to leverage a traditional asset purchase without liquidating their crypto assets.
The loan features a 60% Loan-to-Value Ratio (LVR) cap, meaning the Bitcoin’s value must support at least 40% of the borrowed amount.

In a Nutshell: Demand and Potential

Block Earner reports generating over AUD$110m (approx. USD$72.4m) in preliminary loan applications despite being in soft-launch mode.
The offering positions Bitcoin as a viable asset for financial leverage in real-world scenarios, addressing housing affordability challenges.
CEO Charlie Karaboga asserts this represents a “turning point,” providing a “smarter option” for long-term crypto holders to utilize their assets.

Handling Volatility

Concerning Bitcoin’s price volatility, Block Earner employs a 60% LVR maximum. If asset value (or Bitcoin’s market price) declines sharply, borrowers receive a 30-day notice to correct the Loan-to-Value ratio.

Risk mitigation options include increasing fiat repayments, redeeming additional collateral (more Bitcoin), or topping up the crypto collateral. The system is designed to avoid forced liquidation, with the primary goal being to protect the underlying property.

“The home is never at risk with Bitcoin price,” co-founder James Coombes explained.

Competitive Landscape and Context

Though no formal lending partnerships have been formally confirmed for the initial phase based on preliminary interest, the product aligns with ongoing international explorations of incorporating cryptocurrencies into real estate financing. U.S. regulators, for instance, are considering using crypto assets to count towards mortgage eligibility.

Block Earner emphasizes the product allows crypto holders to redirect capital used for deposits elsewhere, serving assets previously seen as off-limits to those holding crypto due to liquidity concerns within traditional finance.