What role will crypto play in the mortgage industry?

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Proponents of crypto lending also don’t seem deterred by headlines over the past year documenting the bankruptcies of exchanges like Celsius Networks and FTX or the wild swings assets are taking. For their clients, volatility might be the draw.

“Most of our clients who are on the crypto mortgage side, they tend to be better off from a crypto network perspective,” said Josip Rupena, CEO of Milo Credit.

“So the volatility they understand. You can say the reason they created this wealth is because of the volatility, and they understand it goes both ways,” he added. Despite fluctuations in value over the past year, Rupena claims that none of its crypto mortgage clients have been called on the margin to increase their collateral, and they have paid as expected.

In May 2022, bitcoin was valued at around $35,000 per coin just weeks before news broke at Celsius Networks over the summer. Two months later, the digital currency was trading between $19,000 and $21,000, where it largely faltered until scandals involving FTX and its CEO Sam Bankman-Fried began to land in the news cycles in November. . Bitcoin hit a low of $15,760 in the middle of this month, losing more than half of its value in just over six months.

But despite the impact of public relations on the cryptocurrency industry, bitcoin’s value has risen from $16,640 at the start of the year to its current level of $28,929, up almost 75%. .

Ethereum has seen similar swings, dropping from over $2,500 a year ago to under $1,000 two months later. Since early January, its value has increased by 60%, from $1,200 to $1,918.

According to Nevins, the underlying reasons for the industry scandals had more to do with poor leadership than inherent flaws in cryptocurrency investing.

“Most of these issues that have come up over the last year were really ego issues. They weren’t crypto issues, and so we think we will, in due course, return to traditional volatility. that we see in the crypto markets and this sector is only going to grow,” Nevins said.

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