[HN Gopher] Second largest US mortgage lender will accept crypto...
___________________________________________________________________
Second largest US mortgage lender will accept crypto payments this
year
Author : gmays
Score : 131 points
Date : 2021-08-19 20:19 UTC (2 hours ago)
(HTM) web link (www.fxstreet.com)
(TXT) w3m dump (www.fxstreet.com)
| rich_sasha wrote:
| I reckon real-world adoption is what will kill crypto. Major
| markets will either ban it or regulate it through its eyeballs
| (like mandatory registration of wallets to physical people etc).
| It's just forcing a reconciliation.
|
| It may remain in use in less, or in-regulated markets, but that
| will be a secondary thing. Eg what if it is not exchangeable to
| any major currency?
| jonahbenton wrote:
| Thought bubble:
|
| "Yes, we would be delighted for you to settle a debt at 3% per
| with an asset- volatile, tis true- that is nevertheless likely to
| grow 20%-100% per over the next several years."
|
| Cheapest, easiest, balance sheet diversification play ever.
| [deleted]
| peteretep wrote:
| It's all bullshit marketing until someone is accepting payments
| for goods _priced_ in crypto.
| fksadfji12 wrote:
| why?
| eloff wrote:
| Cryptos are extremely volatile. That's not possible until that
| changes.
| rewtraw wrote:
| there are plenty of stablecoins, and most NFTs are priced in
| ETH. It's also trivial to convert volatile tokens into stable
| tokens or fiat automatically. This is a non-issue, but is
| brought up by those who have not paid attention to the crypto
| market in the past 5 years.
| eloff wrote:
| Stablecoins are an obvious exception. That's not what
| people mean when they talk of paying with crypto though.
| MichaelBurge wrote:
| Volatility literally doesn't matter at all.
|
| You can reduce it to 0 by shorting Bitcoin futures contracts.
| You can make it even more volatile if you want. You can
| change the multiplier on base price change i.e. volatility to
| be any number between -300% and 300% of its base rate(the
| caps depend on margin requirement), with appropriate setup.
|
| That's for Bitcoin, but you can do other cryptocurrencies
| indirectly.
|
| And these are government-regulated contracts, marked-to-
| market daily.
| eloff wrote:
| Because my mom is going to do that when she wants to buy
| something. Crypto logic sometimes...
| MichaelBurge wrote:
| Your mom doesn't matter. The topic is finance companies.
| I'm sure the "second largest US mortgage lender" has
| someone who understands this.
| eloff wrote:
| Your crypto logic doesn't matter. If the end good isn
| priced in dollars, why would the finance company price it
| in something else?
|
| How many US mortgages are priced in gold or Yen? Even
| internally?
| MichaelBurge wrote:
| Fixed-income products are generally priced in yield, even
| though the actual agreements mention dollars. The futures
| for treasury bonds are literally denominated in yield
| points, but most (fixed-income) things it's more "people
| denominate in USD and think in yield".
|
| That is, everyone trading bonds/certain commercial real
| estate/mortgages/preferred stocks/etc. converts them to a
| % return, with different yields falling in different risk
| categories. So you might get 3% on a relatively safe
| commercial bond, 10% lending to Turkistan, 4% on a
| property in the middle of a desirable city, 13% if it's
| filled with asbestos and shut down by the city.
|
| It would be possible to price a mortgage in any
| continuous ratio between USD/Bitcoin, though I suspect
| the imputed interest rates for an already-low mortgage
| rate would make it undesirable. Someone would just have
| to punch current prices into a spreadsheet to see how it
| affects the yield.
|
| I would expect Bitcoin specifically to have a high
| interest rate holding a long position(since Bitcoin
| people want high leverage), and the short position to
| have an implied positive yield. So banks should want to
| price in Bitcoin since they like leveraged low-risk low
| profit. But I haven't looked at a price chart for that
| assumption.
| JamisonM wrote:
| If you have to do all this fancy footwork to make
| volatility not matter doesn't that prove that volatility
| does matter.
|
| If you price asset X in crypto in the market and then buy
| options on USD to ensure that your sale price will be
| redeemable for a certain amount in USD in the future if it
| sells then aren't you really just pricing in USD? And then
| suffering a loss on your USD options if the asset doesn't
| end up selling?
| MichaelBurge wrote:
| No, it changes the argument to "Bitcoin is inconvenient
| and requires a lot of maintenance. I have to track
| margin, not lose my wallet, not get scammed, etc. and if
| I forget to roll my futures and it collapses I lose 80%
| of my money"
|
| Which I would agree with, but the original "volatile
| instruments cannot be used for pricing" isn't true.
|
| > doesn't that prove that volatility does matter.
|
| It doesn't matter for making it "possible" or even "safe
| in principle". It does matter if you want it to be
| convenient.
|
| > aren't you really just pricing in USD?
|
| Sort of, but you can choose to price 90% of it in USD and
| 10% in Bitcoin. So arguments with a discrete "impossible"
| seem in conflict with this continuous ratio.
|
| The point is: If there's a maximum volatility an agent is
| willing to accept, one can construct a financial setup
| that meets the constraint. So the volatility itself
| shouldn't be a reason against it.
| SketchySeaBeast wrote:
| Bitcoin gained 7% so far today from it's lowest to its highest.
| If I have a 5% margin on whatever I'm selling how could I ever
| feel good about trading for it, knowing that 7% was equally
| likely to be a drop and not wanting to treat it like an
| investment, where I have to wait for it to gain value again
| before I can sell?
| nostrademons wrote:
| The weird thing is that this is starting to happen to low-
| margin businesses that price their goods in dollars.
|
| Restaurant prices around me have gone up anywhere from
| 25-100% in the last 6 months. I had the surreal experience of
| telling my wife, as she was phoning in a take-out order, "Ask
| them what their current prices are. I got different numbers
| from their Yelp page, the menu photos posted to Yelp, their
| webpage, and their DoorDash page, with the highest being
| twice the lowest." That's some developing-country shit right
| there - normally you think of needing to ask a business what
| their day-to-day prices are as something you do in Venezuela,
| not in the U.S.
|
| I'm told this is because their food suppliers have jacked up
| prices 80-100%, so the restaurants that don't will soon go
| out of business. Memo hasn't filtered down to all
| restaurants, though, and some are more reticent to raise
| their prices than others for competitive or moral reasons.
| seriousquestion wrote:
| How is that marketing? When I'm in Mexico things are priced in
| pesos, but I pay with dollars and crypto.
| ffggvv wrote:
| Wow all 5 people who want to do this will be stoked. In addition
| to the company who will get a nice stock bump from idiot
| investors who buy anything crypto adjacent (they were a meme
| stock and are followign the scam protocol set in place by gme,amc
| et al). And crypto investors are ecstatic in hopes it'll bump
| prices. so as usual all hype and greed and zero utility.
| axiosgunnar wrote:
| Why?
| Ekaros wrote:
| Crypto enthusiast are under served market. There is likely
| enough of them who are willing to pay margin just for sake of
| using crypto. That is compared to trading for fiat and then
| using that to pay...
| FabHK wrote:
| Yes, one reason being that the crypto exchanges charge so
| unreasonably much, a bit like the good old foreign exchange
| offices in airports.
| csharpminor wrote:
| I recently put a down payment on a house using a windfall from
| crypto. It was not easy: mortgage brokers need to do AML due
| diligence on all cash sources looking back at least six months.
|
| I used a major crypto exchange to sell and convert my holdings
| into USD, but frustratingly they did not provide adequate
| documentation to show how the funds were contributed and
| transferred. I needed to email the exchange's support team,
| escalate multiple times, and finally they sent me a series of
| screenshots. The delay almost caused my offer to fall through.
|
| This would have been much easier if I could have transferred
| crypto directly to the mortgage company.
| jtaft wrote:
| Congrats :)
| arthurcolle wrote:
| People with substantial amounts of crypto would like to be able
| to finance larger purchases directly in crypto without needing
| to liquidate into fiat first
| my_usernam3 wrote:
| Probably a stupid question and I'm guessing the answer is
| yes, but you would you still need to pay capitol gains on the
| increase in value from when you purchased it?
| kinghajj wrote:
| Yes, both the purchaser and seller would need to pay
| capital gains taxes on the realized appreciation in the
| digital asset and real property, respectively.
| sneak wrote:
| Even cryptocurrency x into cryptocurrency y exchanges are
| capital gains events, so cryptocurrency into real estate is
| absolutely one such.
| pavlov wrote:
| Either capital gains tax or income tax, depending on how
| long ago you purchased.
| ohazi wrote:
| Yes, money launderers and tax evaders would like to continue
| laundering and evading -- I think the real question is why
| are we making this easy for them?
|
| Buying property with ill-gotten gains is an extremely common
| method of money laundering. Having a large hoard of
| cryptocurrency that you prefer not to liquidate screams "I'm
| trying to pretend that this isn't a taxable event."
|
| We don't let people pay their mortgages with pre-tax stock
| gains, why the fuck are we bending over backwards to let
| people pay their mortgage with cryptocurrency?
| quantumBerry wrote:
| Payment with crypto is a taxable event whether it is
| converted into USD or not. You will pay capital gains or
| income on the delta of the value of the currency at the
| time of transaction.
|
| This doesn't make it any easier to evade taxes than it
| would if you paid with cash. The IRS can subpoena your
| payments and tax the value of the crypto at time of
| transaction. If you don't report the sale (payment) of the
| asset on your taxes, there will be a mismatch that is
| easily traceable.
|
| This is just the real estate industry adding artificial
| value by catering to the crypto market.
| wc- wrote:
| I buy a house with a mortgage, I owe $1k a month or
| whatever to this company to pay my mortgage. If I pay with
| bitcoin it is a capital gains event to convert it to USD
| and I would owe capital gains taxes on the $1k per month or
| whatever my payment is.
|
| It's the same as if I were to convert the bitcoin to
| dollars on my own and pay via dollars. Taxes are still paid
| in this scenario just as they would be if I converted the
| bitcoin to dollars and did whatever else with it...
|
| Why so angry about this?
| dcolkitt wrote:
| There are many with crypto who struggle to get the normal
| banking system to touch their money. And, no, the vast
| majority of those are not engaged in any sort of illegal
| activity.
|
| It'd be much easier to just pay my mortgage in crypto, then
| the endless back and forth that happens to get a bank to
| take crypto proceeds. (Count yourself lucky if they don't
| shut down your entire account!) Crypto users are much like
| sex workers in this regard.
|
| When my crypto startup launched, it was nearly impossible
| to find a bank to give us a checking account. We were
| literally walking around with a VC check and nowhere to
| cash it. Just because we had the words "cryptocurrency" in
| our charter. 99% of the banking system _hates_ crypto. This
| is a smart move to deliver value to an underserved, now
| very wealthy, customer segment.
| amscanne wrote:
| > There are many with crypto who struggle to get the
| normal banking system to touch their money [...] 99% of
| the banking system hates crypto
|
| The current top comment says "cryptocurrency continues to
| occupy more and more ground in the financial world.
| Cryptocurrency continues to expand and grow by every
| conceivable metric".
|
| It feels like cryptocurrency advocates flip freely
| between positioning crypto as embraced by the mainstream
| financial system, or as a foil to the that system,
| whatever serves their purpose.
|
| This isn't a personal indictment, it's just an
| observation reading the comments, especially since I
| shockingly "remain skeptical" per that same top comment.
| ahnick wrote:
| First, this can already be done using MakerDAO CDP loans.
| Convert crypto to DAI using a CDP loan and then convert DAI
| to USD to purchase a property. Second, there are many
| people that own cryptocurrency that are not money
| launderers and tax evaders who might like the convenience
| of paying their mortgage with cryptocurrency.
| knownjorbist wrote:
| Also doesn't have to be DAI, any stablecoin works.
|
| People worked up that this would enable money laundering
| seem blissfully unaware how easy it already was to begin
| with.
|
| It's so strange to me that Hacker News of all places has
| a very vocal anti-crypto, anti-decentralization crowd
| whenever any news like this comes out. In other threads
| they're unironically complaining about "big tech
| censorship" or the increasing control banks have over
| one's life!
| hellbannedguy wrote:
| The ease at which we let foreigners buy our American Real-
| estate has been bothering me for years.
|
| I can't prove it, but it seems like too much foreign
| capital that is buying our land is ill gotten, and allowing
| crypto is just going to make it worse.
|
| I believe we are the Only country that allows foreigners
| buy property with a phone call, or email.
| nwatson wrote:
| It's cyclical, Japanese folks were buying lots of U.S.
| real estate (and other assets) in the 1980s, then it
| fizzled out. [0]
|
| [0] https://www.latimes.com/archives/la-
| xpm-1992-02-21-mn-2588-s...
| knownjorbist wrote:
| It needs to go in the other direction - it should be easy
| for anyone to buy property anywhere.
| FabHK wrote:
| Hmmm. It is not easy for foreigners to buy property in
| most of Asia (except commonwealth-influenced
| jurisdictions like HK, Australia) from what I gather. It
| does not strike me as unreasonable. Prices in London for
| example are hard to afford for the people who actually
| live there because so much property has been bought by
| people who don't live there.
| knownjorbist wrote:
| Okay. You're attacking the symptom, not the problem. Make
| it easier to spend your money how you please.
| quantumBerry wrote:
| It should be reciprocal. We shouldn't allow foreigners
| who block land sales to us to buy our land.
| morpheos137 wrote:
| Because "technology."
| seany wrote:
| Sure you can. With enough networth in an account you can do
| margin LOC in the 1.9-2.5% range.
|
| The whole train of thought is weird though. There are
| plenty of people who pay all of their taxes on everything,
| but still deal in largely cash.
| purple_ferret wrote:
| what does that have to do with paying your monthly on a 30
| year mortgage?
| bsder wrote:
| So they can let corrupt Chinese middle party bosses buy US real
| estate directly.
|
| Then, in the remote chance the business gets convicted later up
| the road, it will give up 1% of it's quarterly operating profit
| as a fine.
|
| I mean, duh, that's how US finance operates. </s>
| game_the0ry wrote:
| Better question - why not?
| [deleted]
| tablespoon wrote:
| > Better question - why not?
|
| Because crypto payments are niche and likely come with more
| hassle (e.g. volatile value, lender needs dollars and has to
| take on any risk with liquidating bitcoin/other
| cryptocurrencies). You might as well ask why US mortgage
| lenders don't accept payments in RMB or Euros.
| wc- wrote:
| Why do you care if this company wants to take on the hassle
| of converting the bitcoin to $ for the customer? It's an
| additional source of revenue for them.
| squeaky-clean wrote:
| Because it's a valid answer as to why would a business
| not choose to do this?
| adamc wrote:
| Also, the potential for attracting Congressional attention.
| gentleman11 wrote:
| The climate emergency?
| [deleted]
| rileyphone wrote:
| Ironically I think the best application of Bitcoin right
| now is ransomware, bringing the tragedy of its existence
| close to the US military's.
| aynyc wrote:
| Tax saving for buyers with crypto holding, therefore, increase
| demand. And probably hefty fees involve.
| FabHK wrote:
| It would not trigger a taxable event? Oh, that would have
| real world benefits then.
|
| ETA: according to comments further down, selling your crypto
| is taxable, whether you get dollar for it or a house. Which
| makes sense, of course.
| sciprojguy wrote:
| How can this _possibly_ go wrong?
| robot_no_419 wrote:
| You gotta love the HN crowd who finds a way to remain skeptical
| after cryptocurrency continues to occupy more and more ground in
| the financial world. Cryptocurrency continues to expand and grow
| by every conceivable metric and some people still think it's a
| fragile scam. Here's a hint: when your politicians already own
| cryptocurrency and are arguing in its favor, that's the signal
| that the industry has already basically captured the regulators
| and the game is over. Crypto is here to stay.
| endymi0n wrote:
| As someone who's been through the dotcom bubble, I vividly
| remember talking to my classmate driving home on our bikes and
| he told me about the Infineon stock he just bought. We were
| kids, 16 years old and felt like the smart brokers in the
| magazines. In retrospect, the writing was on the wall when
| tabloids were advising to excited and innocent consumers which
| stock to buy on their front page.
|
| The shock didn't come more than a year after and it was mostly
| the last ones to buy in to get burned.
|
| This time, it's worse. In the 90's, it was all real stock, and
| it was getting visible when the companies started to
| underperform. There were a few physical assets to sell.
|
| This time, it's much worse and the crypto boys will only find
| out that the only real value their bytes have is whatever
| anyone else is willing to pay for it.
|
| I'm not worried about crypto being here to stay. That won't
| happen. I'm worried about what it will take with it when it
| vaporizes in front of the bulls.
| robot_no_419 wrote:
| People who are still comparing equity (a legal contract
| representing ownership in a centralized US company) to
| cryptocurrency (a novel class of commodities that has no
| central authority or legal structure) are comparing apples to
| gold bars.
| ryan93 wrote:
| How does taking crypto improve lending or the customer
| experience. What value was created?
| robot_no_419 wrote:
| I don't have to answer this question for cryptocurrency to be
| successful. If you don't understand (or don't want to),
| that's your financial prerogative.
|
| YoY metrics such as total number of users, total number of on
| chain txns, total number of exchanges and companies are all
| increasing. No conversation on HN is going to change the fact
| that an ever growing population of people and companies DO
| see value in crypto. So maybe ask yourself why it's only
| getting stronger if there's zero value to be found in this
| industry.
| Dayshine wrote:
| Plenty of exploitative, capitalist, anti-consumer, business
| models are successful.
| robot_no_419 wrote:
| Sure, and what? My point was that left on its own,
| cryptocurrency is clearly on a trajectory to a permanent
| place in the financial system. Idk if it's good or bad,
| but it's happening unless global regulators all
| coordinate to impose extremely draconian measures to stop
| it. Otherwise, the technological and financial elements
| clearly have staying power.
| [deleted]
| JumpCrisscross wrote:
| > _What value was created?_
|
| Borrowers want to pay with crypto. Originators add a new FX-
| esque transactional revenue stream. Seems like a classic win-
| win.
| [deleted]
| okwubodu wrote:
| A few weeks back I sent money to someone on the Solana
| network and they saw it in their wallet before I could say I
| pressed send. That's fairly valuable.
| FabHK wrote:
| Today I sent EUR to someone by Bank (N26) and they had it
| in their account within a minute, no fee. A while back I
| sent a BTC transaction, $50 fee, and it took around 20
| hours to confirm.
|
| Fast, reliable transfers are valuable, but hardly a
| property of crypto alone.
| arcticbull wrote:
| Did you include the time it takes to buy solana on an
| exchange and the time it takes to sell solana on another
| exchange and settlement periods on both sides? You said
| send money, which solana is not so you should include the
| whole process.
|
| Instant payments have been available through the world for
| ages, SEPA for instance and soon RTP in the US but that
| value doesn't accrue to the underlying currency. That makes
| the service valuable not the medium.
|
| Not to mention square cash and Venmo. The value is captured
| in the equity of the companies not in dollars. Now you
| could tell me solana is both like paying someone in square
| shares via square cash but now you've got a security on
| your hands and about 1000 more problems.
| robot_no_419 wrote:
| Personal anecdotes about this: Everyone I talk to who has
| actually used cryptocurrency all think it's easier to use
| than conventional finance. Venmo and Circle have cash
| limits (which caused a problem when I was helping someone
| buy a car once) as well as geographic restrictions (which
| was also a problem once when I was sending someone in
| South America some payments). It also takes 3 days to
| verify a new bank with Venmo (unless you want to give
| them your banking credentials, which is absolutely
| insane). Some of my friends use Venmo, others use Circle,
| others use Cashapp... it's a mess of centralized and
| disjoint products.
|
| Plus, I've been battling with Venmo's customer support
| for days now because my new phone number apparently was
| used before to activate an account and they need to see
| my phone bill to release it.
|
| Sorry, I just really hate Venmo right now.
| wilg wrote:
| Wait until you find out how many cryptocurrencies there
| are!
| robot_no_419 wrote:
| I have a single app that can 1) host hundreds of
| different coins, and 2) convert them on a built in
| exchange. So this has been a complete non-issue for me.
|
| If there's a single app that lets me use Venmo and Paypal
| and Cashapp all at the same time, I'd love to know about
| it.
| okwubodu wrote:
| > You said send money, which solana is not so you should
| include the whole process.
|
| You're right, even though it's still faster for me. But
| the whole point of allowing payments in crypto is
| removing steps from that process. Which is valuable.
|
| > The value is captured in the equity of the companies
| not in dollars.
|
| I do not care about companies. If it helps people I'm for
| it.
| andrewmcwatters wrote:
| Interesting that no one thinks holding 100% gold is an
| investment.
|
| I wonder why people don't think holding 100% bytes is either.
| mgh2 wrote:
| I wonder if HN was skeptical during the dot com bubble...
|
| Politicians are as gullible as the public when it comes to
| quick money.
|
| Some organizations today which are scams are allowed to live
| due to certain freedoms, does not prove the contrary - ex:
| Scientology, MLMs, etc.
| zarzavat wrote:
| Politicians can see where the innovation is happening, unlike
| half of HN apparently.
|
| HN/SV's idea for disruption of money transfer is something
| like Venmo, where you can send money from one person in US to
| another person in US through an app.
|
| Cryptocurrency's idea for disruption of money transfer is
| that you sign a transaction and broadcast it, and it works
| anywhere in the world without discriminating on nationality,
| and without any counterparty or intermediary.
| vvarren wrote:
| So my understanding is that you'd owe a set amount in Fiat but
| you can make payments in crypto. Would you be locked into crypto
| for payments, at a designated fiat value or designated crypto
| value?
|
| Because if you borrowed in crypto for a house and then the price
| of crypto skyrocketed you would be screwed. Seems like a nice
| option for people trying to short the crypto market, but I doubt
| this has much viability.
|
| Companies realize they can get a headline by adding crypto as a
| payment method, but nobody cares anymore. It's the equivalent of
| a brick and mortar store accepting Venmo and then gathering
| everyone in the town to tell them how innovative they are...
| quantumBerry wrote:
| Nearly certainly everything would nominally be in fiat and at
| the time you pay in crypto, they would credit you the value of
| the crypto at the time of payment.
|
| I can't imagine they're going to go through the effort and risk
| of effectively hedging their crypto risk through securities
| markets, which would come at a premium.
| Finnucane wrote:
| Given the volatility of Bitcoin it would be real rate risk for
| the lender. I mean, over decades? There's no way to price that.
|
| During the great bubble, borrowers in Eastern Europe got
| mortgages in Swiss francs. When the market collapsed and the
| exchange rate sank, they were completely fucked. Don't borrow
| in currency you can't easily get your hands on.
| quantumBerry wrote:
| There is a way to price it, there are perpetual futures
| market for popular coins. You would pay the premium for those
| futures but by shorting or buying futures you can lock in
| value within a few percent.
|
| For example, if i expect 1 bitcoin 10 years from now, I sell
| a future contract promising to sell 1 bitcoin at $45,000. If
| the price falls 5,000 over 10 years, the value of my contract
| is now worth $5,000 plus the 40,000 value of the coin. If I
| am on the opposite side and have to pay in bitcoin, I can buy
| a futures contract for 1 bitcoin at 45,000. If the price of
| bitcoin rises I am offset by the value of the futures
| cotnract and if the price falls the negative value of the
| futures contract locks my price at ~45,000.
|
| The cost here is the premium of the futures contracts, which
| of course could make it more expensive to operate a crypto
| mortgage in the long run.
| TheDong wrote:
| As I understand it, the majority of these future's
| contracts are on Etherium or another crypto market, and pay
| out in stable coins at best.
|
| That's already too much risk for 10 years out. The chance
| of etherium having died in the PoS transition, or the
| chance of any given market-related contract having an
| exploit that renders it worthless, are both simply too high
| to actually participate in for a 30 year loan.
|
| Do you have a reference to a place where I could get one of
| these futures to get a good feel for how much extra it
| would cost to secure a loan against that volatility?
| quantumBerry wrote:
| I think the non-KYC exchanges may use stablecoins as
| collateral due to the inability to service fiat. But
| Kraken for instance has BTC-USD perpetual futures [1].
|
| Presumably a large mortgage lender would write their own
| contracts or collaborate with an exchange for a product
| using their own mortgage contracts instead of USD on
| margin as collateral for the loan.
|
| [1].https://futures.kraken.com/trade/futures/PI_XBTUSD
| vvarren wrote:
| That is definitely the solution to rate variability, but it
| doesn't make sense economically. If you are borrowing money
| why would you also want to buy futures contracts, it would
| eat into your mortgage spending power when you can just
| trade in the Bitcoin, get a normal mortgage and probably
| far better rate, then buy at full buying power.
| quantumBerry wrote:
| Thus you outline who benefits most from a mortgage in
| crypto -- someone who expects regular payment in fixed
| crypto in the future. For that person, their full buying
| power would be a crypto mortgage as they wouldn't lose
| buying power by hedging with futures against USD.
|
| I have no idea who that person would be.
| FabHK wrote:
| The futures on Bitmex go out less than a year, and on CME
| until Dec 2022.
|
| I very much doubt they'll hedge with futures - I'd assume
| they just sell the crypto as soon as they have it. They
| might put on a position in a future for the short period of
| time between agreeing on a price and getting paid.
|
| And of course the house will be denominated in USD. So,
| bottom line, not much more than a marketing gimmick.
|
| ETA: And perpetual futures are basically just spot, with
| financing baked into a funding rate (which is positive or
| negative depending on demand, but unpredictable ex ante,
| and as such does not solve your problem).
| quantumBerry wrote:
| It sounds like a fixed term future written by the lender
| directly may be a better option, I would not expect a
| large lender to actually trade futures Kraken/Coinbase.
|
| Agreed it is a gimmick, I would imagine everything will
| be in fiat except at the time of each payment, when the
| instantaneous crypto value will be credited.
| paul_f wrote:
| The problem being that I would not trust any crypto futures
| market to actually payout if prices crash.
| jedberg wrote:
| BTC isn't a viable currency because of its volatility. You can't
| price something in BTC. That would be like saying "this car costs
| 10 shares of NFLX". The price of the car changes by a few percent
| per day, up and down. It's not tenable.
| zz865 wrote:
| Would you still get the tax deduction?
| nopeYouAreWrong wrote:
| lol. "we are investigating the feasibility and requirements"
| somehow means "this is totally happening soon"....okay...
| mc32 wrote:
| Will people using crypto to buy/finance houses need to provide
| documentation regarding the provenance of the funds as well as
| being in the clear around any tax declarations?
|
| If not, there would likely be some who see this as a vehicle to
| clean up some holdings, depending on provenance.
| ahnick wrote:
| Is documentation for the provenance of funds, typically
| required in all cash real estate transactions?
| nradov wrote:
| Generally cash real estate transactions aren't subject to
| most KYC / AML rules. But the US federal government
| recognizes that as a problem and is working on tightening
| enforcement.
|
| https://legal.thomsonreuters.com/en/insights/articles/u-s-
| re...
| JoshTriplett wrote:
| > Generally cash real estate transactions aren't subject to
| most KYC / AML rules.
|
| That's not entirely true. The bank wants to know enough
| information to make sure that the cash came from the buyer,
| and not from someone else other than the buyer, for AML
| reasons as well as creditworthiness. So they do seek proof
| of the provenance of the cash sufficient to demonstrate
| that it actually came from the buyer.
|
| (Source: detailed conversations with bankers when buying a
| home.)
| toomuchtodo wrote:
| Proof of source of cash funds in a real estate
| transaction is required because if the house is bought
| with illegal drug proceeds, the collateral can be seized
| by the Feds, leaving the note investors holding the bag.
| The policy originated in the 80s.
|
| https://www.washingtonpost.com/archive/realestate/1989/05
| /06...
|
| (family member is a mortgage underwriter)
| j_walter wrote:
| I would really love to use some of my crypto that I obtained
| from mining to pay my mortgage directly. Much less likely to
| set off alarm bells...
| munk-a wrote:
| Considering how much money laundering real estate gets used for
| right now this is the last place I'd like to see crypto get
| involved. We already have a legion of issues with even legitimate
| money being stashed in real estate here (in Canada) and down
| there (the US) to get it out of reach of the Chinese government.
| I don't think we need to do anything to ease this process at all.
| PragmaticPulp wrote:
| Paying by crypto won't short-circuit any of the laws and
| regulations around transferring money.
|
| Most of the time, these companies are simply partnering with
| external firms to process crypto payments, but they're actually
| taking cash. They'll probably charge you a fee, too, which
| means no one will actually use it.
|
| These headlines are the equivalent of a company announcing that
| they'll take debit cards or credit cards as a payment method.
| They don't actually care how the money arrives, as long as it
| arrives in their bank accounts.
| siruncledrew wrote:
| So does this mean they will sell the data of everyone who pays in
| crypto to the government, so the IRS can check if people paid
| their crypto taxes?
| cwkoss wrote:
| Are there any tax benefits from paying with crypto vs the
| borrower selling crypto for cash and the lender using that cash
| to buy crypto?
|
| Basis gets set at time of payment, so borrower would still have
| to pay capital gains on the appreciated value, right?
| blt wrote:
| So, someone high up in the company is heavily invested in crypto?
| seriousquestion wrote:
| Is that the only explanation? Or is it possible they see
| weakening institutions and weakening petrodollar and want to
| get ahead of the curve or diversify?
| ChainOfFools wrote:
| This is the reason.
| newbamboo wrote:
| This seems to be in keeping with the general theme of things.
| jonas21 wrote:
| > _The use of crypto in real estate purchases has a history
| dating back seven years, with BitPay helping facilitate the sale
| of a Lake Tahoe property that sold for $1.6 million in BTC in
| 2014._
|
| In case anyone's wondering, it was 2,739 BTC, which would be
| worth around $127M today.
|
| See: https://www.wsj.com/articles/lake-tahoe-property-sells-
| for-1...
| epa wrote:
| This transaction was actually facilitated by chamath
| palihapitiya who paid USD cash to a Bitcoin company who bought
| it and paid out the seller in USD cash. It was a publicity
| stunt to prop up Bitcoin and it worked.
| porphyra wrote:
| United Wholesale Mortgage was the subject of some reddit
| /r/wallstreetbets pumping earlier this year which then later
| fizzled out.
|
| I guess they are trying to piggyback off crypto hype to keep up
| their meme stonk status.
| purple_ferret wrote:
| Looks like a SPAC stock too. Never the most reputable...
| weird-eye-issue wrote:
| SPACs have been around for a while and plenty of reputable
| companies have gone that route
| halfmatthalfcat wrote:
| Why so defensive? People have a right to be skeptical about
| SPACs. They've only been "mainstream" for the past couple
| years and are quickly losing steam as a vehicle for public
| exposure[1].
|
| [1] https://www.bloomberg.com/opinion/articles/2021-03-08/s
| pac-p...
| weird-eye-issue wrote:
| Yes there was an explosion in SPACs and that died down
| back to normal levels but even before that plenty of
| companies that are performing very well went public via a
| SPAC. Saying it's "never reputable" is just wrong.
|
| If somebody thinks all SPACs are pump and dumps they
| probably only learned about them recently through the
| media
| chairmanwow1 wrote:
| But as of late SPAC stocks are almost defined as an avenue
| for pumping fees and pushing shit companies into the public
| markets.
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