Better and Coinbase mortgage terms allow pledged bitcoin to be reused as collateral

Coinbase's help materials say the bitcoin is transferred to a Better custodial account on Coinbase Prime, while Better's product page describes two loans: a conforming mortgage on the home and a separate loan secured by crypto and a second lien on the property.

The central distinction is no forced sale does not mean no risk. A borrower may avoid selling into an unfavorable market, but still gives up control of the coins and accepts the counterparty, custody, collateral and foreclosure risks written into the contracts.

Reuse clauses change the custody picture

The product terms allow the pledged bitcoin to be reused or rehypothecated in connection with the loan. That means the collateral may support other financing or operational arrangements while the borrower remains responsible for the mortgage, subject to the contract and applicable law.

The structure also creates a long holding period. Coinbase says collateral must be worth at least 250% of the down-payment loan amount, but a borrower still cannot simply withdraw the bitcoin when the price rises. The collateral stays encumbered until the specified repayment or refinancing event.

Readers should review custody, default and release terms before comparing the product with a cash down payment. Questions include who controls the wallets, what happens after missed payments, how claims are prioritized in insolvency, whether the collateral can be lent onward and how release timing works at closing.

The product is a meaningful bridge between crypto ownership and conventional housing finance, but it is not a way to make bitcoin behave like cash. The borrower retains price exposure while adding a real-estate obligation, a custody dependency and contract terms that can make a liquid asset unavailable for years.