Better and Coinbase’s bitcoin-backed mortgages can reuse borrowers’ collateral

Better and Coinbase launched a program allowing homebuyers to pledge bitcoin as collateral for mortgages while retaining crypto exposure. Coinbase’s custody terms permit reuse (rehypothecation) of deposited bitcoin, meaning the same BTC collateral can be deployed by Coinbase for other activities. This arrangement increases demand for bitcoin as collateral and could expand crypto-finance linkages with the mortgage market. However, it concentrates counterparty and custody risk in centralized custodians and could amplify contagion or regulatory scrutiny if stress events occur.