Crypto assets backed property loans for the long term is an issue: Weiss Ratings
Weiss Ratings researched the current economic situation of the US and current mortgage offerings by crypto-associated companies.
Crypto adoption and blockchain technology use cases increasing rapidly and in this increasing adoption, companies and businesses want to take some better advantages to provide services as first movers. However it is hard to go with high-level crypto-backed loan services but still, many crypto and traditional companies provide, thanks to the increasing competition among businesses.
On 3 May, A report was published by Weiss Ratings, a Florida-based rating and research firm. Rating firm figured out the degree of risk associated with the crypto-backed long-term property loans under the current critical economic situation of the US.
In particular, Weiss Ratings noted that a digital banking startup company Milo from Miami provides 30 years of long-term mortgages loan backed by Bitcoin, Ethereum, and also Stablecoins. And also companies offer 0% down payment. With these mortgage offerings, customers needed to pay interest between 3.95% and 5.95%.
Jon D. Markman, the analyst at Weiss Ratings, noted that huge critical situations and possible future policies by the US Federal Reserve may create a very big issue for such companies, which provide Bitcoin-backed mortgage loans.
“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.”
Despite such huge concerns, analysts admitted that possibilities for the success of cryptocurrencies in the financial system are real and also it should be in financial systems.
“no matter what the markets are doing, the potential to succeed in cryptocurrencies is real.”
The majority of crypto and stock Investors are worried about the Fed’s initiative to slow down the four-decade highest inflation. The majority of the investors are taking this matter very seriously as a negative point for this market.
Read also: Banco Galicia become the first Argentinian Bank to allow Bitcoin trading
