Andrew Hones, CEO and founder of New Market Capital, revealed on CNBC Friday “Battery Finance” – an asset management platform that leverages traditional assets like real estate and Bitcoin BTC/USD connects.
What happened: In one Appearance at Squawk Box, Hones announced it would originate a loan tying a 63-unit multifamily property in Philadelphia with Bitcoin as collateral.
A $2 million loan was issued to refinance the existing mortgage on the property, finance improvements and allocate funds for the purchase of Bitcoin.
The loan combines traditional real estate collateral with Bitcoin, thereby diversifying the risk.
Borrowers must hold Bitcoin in escrow for at least four years to ensure stability.
The Crypto King adds a hedge against inflation and improves asset protection compared to traditional loans that rely solely on ownership.
Borrowers can repay the loan at any time without penalty, but the Bitcoin as collateral remains locked for four years.
Hones noted that this hybrid approach combines stable, fluid assets with Bitcoin’s growth potential and creates a hedge against volatility.
Also read: This is the reason
Why it matters: Hones believes that Bitcoin can help supplement income portfolios and fill retirement fund gaps.
Looking at the long term, Bitcoin performance offers the possibility of significant returns – the worst historical return over a 4-year period is 23%.
This approach aims to reduce dependence on investments in risky loans and reduce asset and liability mismatches in pension portfolios.
By integrating Bitcoin into traditional lending structures, Hones envisions a transformational investment strategy capable of reducing pension funding gaps and increasing overall portfolio stability.
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**What specific regulatory hurdles does Battery Finance face in integrating Bitcoin into the traditional mortgage market, and how is the platform addressing these challenges?**
## World Today News Exclusive Interview
**Topic:** Revolutionizing Real Estate Finance: Bitcoin Enters the Mortgage Market
**Guests:**
* **Andrew Hones:** CEO and founder of New Market Capital
* **Dr. Elizabeth Carter:** Renowned economist specializing in decentralized finance
**Introduction:**
Welcome to World Today News. Today, we delve into a groundbreaking development in the world of finance – the integration of Bitcoin into traditional real estate lending. Joining us are Andrew Hones, the visionary behind this innovative platform, and Dr. Elizabeth Carter, a leading expert on the impact of decentralized finance.
**Section 1: A New Paradigm in Asset-Backed Lending**
* **Interviewer:** Mr. Hones, your platform, “Battery Finance,” is making waves with its unique approach to secured lending. Can you elaborate on the concept of using Bitcoin in conjunction with traditional real estate assets as collateral? What were the driving forces behind this groundbreaking strategy?
* **Andrew Hones:** (Expands on the concept, emphasizing the diversification of risk and the desire to offer borrowers access to alternative investment opportunities)
* **Interviewer:** Dr. Carter, as an economist, how do you perceive this novel approach to asset-backed lending? What are the potential implications for both borrowers and lenders in the long run?
* **Dr. Elizabeth Carter:** (Provides an objective analysis of the pros and cons, discussing potential risks and benefits along with the broader impact on the financial landscape)
**Section 2: Bitcoin as a Hedge Against Inflation and Volatility**
* **Interviewer:** Mr. Hones, you mentioned that Bitcoin acts as a hedge against inflation. Can you explain how this mechanism works within the loan framework and what safeguards are put in place to mitigate Bitcoin’s inherent price volatility?
* **Andrew Hones:** (Elaborates on the inflation-hedging properties of Bitcoin and discusses the escrow mechanism with a 4-year lock-up period to ensure stability.)
* **Interviewer:** Dr. Carter, how reliable is Bitcoin as a genuine hedge against inflation in the long term? What factors could influence its effectiveness as a store of value within this financial model?
* **Dr. Elizabeth Carter:** (Offers a nuanced perspective on Bitcoin’s inflation-hedging capabilities, outlining potential internal and external factors that could influence its performance)
**Section 3: Pension Funds and the Future of Investments**
* **Interviewer:** Mr. Hones, you’ve stated that this model aims to address pension fund gaps and improve overall portfolio stability. Can you elaborate on how this integration of Bitcoin into pension strategies could achieve these goals?
* **Andrew Hones:** (Explains how the historical performance of Bitcoin can potentially generate significant returns and diversify retirement portfolios, addressing the risks associated with traditional investments.)
* **Interviewer:** Dr. Carter, what are your thoughts on the suitability of Bitcoin as a long-term investment strategy for pension funds?
Are there any regulatory or ethical considerations that need to be addressed
* **Dr. Elizabeth Carter:** (Discusses the suitability of Bitcoin for pension funds, outlining potential benefits and challenges while addressing relevant regulatory and ethical concerns.)
**Conclusion:**
* **Interviewer:** Mr. Hones and Dr. Carter, thank you for sharing your valuable insights.
This innovative approach to leveraging both traditional and digital assets undoubtedly raises questions and generates excitement. It will be fascinating to observe the long-term impact of “Battery Finance” on the world of real estate and the evolution of investment strategies in the years to come.
Thank you for joining us on World Today News.
