Bitcoin Billionaire Brock Pierce Takes Out First-Ever Bitcoin-Backed Mortgage
Christina Comben | Apr 04, 2019 | 09:00
Bitcoin billionaire Brock Pierce took out a crypto-backed mortgage to buy a $1.2 million home in Amsterdam. But why didn’t he just sell some bitcoin and buy it?
Use Bitcoin as Collateral for a Mortgage
Cryptocurrency companies that allow you to earn interest on your bitcoins or get dollar loans are springing up like weeds.
But you naturally imagine their ideal target for loans as young crypto HODLers that need fiat for something pressing. Not ultra-wealthy Forbes top 20 richest cryptocurrency billionaires like Brock Pierce.
The Controversy That Follows Brock Pierce
To much of the American public, Brock Pierce will always be that child actor who starred in Disney’s The Mighty Ducks. Not many of them know how knee-deep Pierce is in the cryptocurrency industry, (and controversy as well).
An early adopter in the space, in 2013, Pierce co-founded VC firm Blockchain Capital (BCC) which had already raised some $85 million in two venture funds by Oct 2017. He was also a large investor in Etherum and supported the early days of Coinbase.
At the height of his success, Pierce was the co-founder of Block.one, the entity behind EOS. He was named by Forbes as one of crypto’s top 20 richest people in February 2018.
Then he was called out one month later on live television on John Oliver’s show Last Week Tonight over the allegations of his involvement in an underage sex scandal in the 90s.
Even though he had reached an out of court settlement over that scandal, the repercussions would linger on. Shortly after, Pierce announced his departure from EOS. Several board members of the Bitcoin Foundation also left when Pierce became Chairman.
Has The Mighty Ducks Actor Fallen on Hard Times Again?
Yesterday, the world’s biggest crypto lender Swiss-based NEXO announced that Pierce was their first borrower to back a mortgage using cryptocurrency as collateral last November. NEXO told FOX Business that Pierce was the first person in the world to use his crypto assets to buy real estate.
Antoni Trenchev, co-founder and managing partner at NEXO continued to say:
He backed the entire loan for the house with bitcoin… This was our first-ever crypto-backed mortgage.
With 95% of his net worth in cryptocurrencies and a less-than-squeaky-clean reputation, has Brock Pierce fallen on hard times again, needing to borrow money to buy a $1.2 million home?
If Pierce is worth billions (or, at least, hundreds of millions) it rather begs the question–why didn’t he just buy it?
Die-Hard HODLers Don’t Want to Sell Their Bitcoin
It appears that the reason Pierce sought a Bitcoin-backed mortgage for the home is more one of financial astuteness than need.
Die-hard Bitcoin HODLers don’t want to sell their assets. They’re convinced that the bull run will come again–but they need to access fiat in the meantime.
This is why companies like NEXO, BlockFi, Celsius, InLock, and countless others, are finding more customers.
It’s not just the high interest that HODLers can earn on their accounts, but the low-interest loans that are really taking off.
Celsius alone has already initiated over $1 billion worth of crypto loans since June of last year–and it’s an incredibly appealing option. Rather than get a mortgage from a bank, these companies charge as little as 8 or 9 percent interest.
And whale-sized HODLers with dwindling crypto wealth are lapping it up… Pierce reportedly told FOX Business that these types of companies are a bridge between the:
old world of traditional finance and the brand new frontier that blockchain now enables.
He went on to say:
Being able to borrow against one’s crypto assets gives one options… I was able to hold on to my crypto and settle the transaction in fiat.
Will Bitcoin-backed loans become a popular way to make major purchases? Share your thoughts below!
Images via Shutterstock, Bitcoinist archives
