- The U.S. Housing agency could soon accept crypto as a reserve for home loan applications.
- Market leaders projected that the update could reduce selling pressure on BTC.
The crypto sector scored another historic win this week.
In a directive on the 25th of June, the U.S. Federal Housing Finance Agency (FHFA) instructed Fannie Mae and Freddie Mac to consider cryptocurrency as an asset class for single-family mortgage risk assessments.
The order signed by FHFA Director William J. Pulte allowed loans to close without requiring cryptocurrency to be converted into U.S. dollars beforehand.
Part of the guidance read,
“U.S. Federal Housing FHFA, hereby directs each Enterprise to prepare a proposal for consideration of cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments, without conversion of said cryptocurrency to U.S. dollars.”
Pulte added that the move is ‘historic’ for the two industries and in line with President Trump’s pro-crypto vision for America. The order would be implemented as soon as ‘reasonably practical.’
Until now, crypto holdings were largely ignored in mortgage underwriting unless liquidated into cash.
But the directive now allows crypto assets, provided they’re stored on U.S.-regulated centralized exchanges, to count toward reserve assessments.
Crypto merges with TradFi – Will Bitcoin benefit more?
Naturally, the update drew swift reactions from crypto leaders.
For his part, Michael Saylor, Founder of Strategy (formerly MicroStrategy), praised the crypto inclusion.
Source: X
For perspective, JPMorgan Chase was the first largest U.S. bank to embrace crypto ETF for loan collateral.
With significant regulatory rollbacks from the Joe Biden era’s anti-crypto and debanking guidelines, more banks could embrace digital assets.
A similar momentum has picked up in other jurisdictions as well, like South Korea and the United Arab Emirates (UAE). A fully fledged global pivot could confirm Saylor’s outlook.
Saylor added that the inclusion could primarily benefit Bitcoin [BTC].
“Future generations will remember this as the moment Bitcoin entered the American dream.”
Most industry leaders have been echoing this line of thought, where BTC is used as collateral for liquidity, instead of holders selling their stash to cover bills.
In fact, according to Hunter Horsley, CEO of digital asset manager Bitwise, this trend could eventually reduce BTC sell pressure over time.
He projected a likely maturation and tapered sell-off when BTC peaks around $130K.
Charles Edwards, founder of macro hedge fund Capriole Investment, is also inclined towards Horsey’s projection. Reacting to the crypto-backed loans update, he noted,
“Millions of BTC now no longer need to be sold. Big news.”
Overall, the U.S. housing agency’s move could reduce future selling pressure on BTC as it becomes key collateral for securing loans and liquidity without necessarily offloading one’s stash.
