On the heels on bitcoin’s recent mystery surge to a five-month high after several months of lows, the world’s biggest crypto lender announced it officially backed its first mortgage using the cryptocurrency so 'Mighty Ducks’ actor Brock Pierce could buy a $1.2 million home.
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Swiss-based Nexo, a startup dubbed as an instant crypto credit line, told FOX Business in an exclusive interview that Hollywood child star is the first person in the world to use his crypto assets to buy real estate using their platform.
Last November, the actor-turned entrepreneur, who holds more than 95 percent of his net worth in cryptocurrencies, used more than three million in bitcoin as collateral to purchase a 1.2 million renovated chapel-turned-home in Amsterdam.
“He backed the entire loan for the house with bitcoin,” Antoni Trenchev, co-founder and managing partner at NEXO tells FOX Business. “This was our first-ever crypto-backed mortgage.”
Trenchev says Pierce, like most crypto enthusiasts, are convinced that the crypto world will take off so they never want to sell their assets but sometimes life gets in the way and they need fiat cash fast.
“So we take that bitcoin and other digital currencies as collateral using a third party qualified custodian to store it and give them fiat cash for it. But neither the client nor us have access to the coins,” Trenchev adds. Customers can get instant loans of up to $2 million in 45 different fiat currencies within 24 hours.
And, just like regular credit cards, Nexo charges customers interest rates starting at 8 percent to as high as 16 percent. Additionally, due to the uncertainty in the fluctuation in prices in cryptos over the last few years, Trenchev says customers are expected to put down double the amount as a buffer.
“For a loan of $10,000 dollars you will need to deposit $20,000 in bitcoin. So, we lend you like 50 cents on the dollar."
In a statement to FOX Business, Pierce said the new platform, which launched last year, has the capability of being the bridge between the “old world of traditional finance and the brand new frontier that blockchain now enables."
“Being able to borrow against one’s crypto assets gives one options, when wanting to purchase a property, and aligns with my philosophy that real estate and tokenization will be a quadrillion dollar market. I was able to hold on to my crypto and settle the transaction in fiat,” Pierce said.
Last year, prior its launch, Nexo raised more than $52 million and to date has more than 170,000 clients worldwide.