Cardone Pushes to Merge Bitcoin and Mortgages
Real estate developer Grant Cardone is challenging the bedrock of commercial lending. He is calling for a radical shift in standards, proposing that Bitcoin be accepted alongside traditional real estate as collateral for property-backed loans. Major financial institutions currently treat these as separate asset classes, but Cardone is betting that hybrid portfolios—marrying income-generating properties with digital currency—will eventually become the industry standard for institutional financing.
The $105 Million Bitcoin Strategy
His latest real estate fund holds $105 million in Bitcoin, paired with $95 million in real estate equity and $140 million in debt. Under current underwriting practices, however, this digital cache is invisible to lenders. Cardone argues that government-sponsored enterprises like Fannie Mae and Freddie Mac should eventually accept a unified collateral package that includes both physical property and Bitcoin.
The firm is already testing the waters. It has entered into six hybrid agreements totaling more than 1 milliard dollars, utilizing approximately $200 million in unleveraged Bitcoin. Cardone believes this model offers a direct solution to capital expenditure challenges and could eventually disrupt the 4 000 milliards de dollars Real Estate Investment Trust (REIT) industry.
Breaking the Institutional Divide
The gap between private innovation and institutional reality is wide. Lenders currently refuse to include Bitcoin in standard loan-to-value calculations, keeping it strictly siloed from real estate assets. To navigate this, Cardone avoids complex derivatives, opting instead to keep Bitcoin with licensed custodians in a long-term “buy and hold” strategy.
This approach mirrors the evolution of Bitcoin-focused treasury companies, which often draw comparisons to the historical structure of the Grayscale Bitcoin Trust. Much like the market environment preceding the approval of spot Bitcoin ETFs in the United States, current investors are closely watching the spread between market price and net asset value, balancing potential appreciation against the risks of a volatile asset.
A Private-Market Experiment
The future of this hybrid model hinges on whether financial institutions can formalize underwriting criteria for non-traditional collateral. Cardone envisions a future where Bitcoin functions as a standard treasury component, sitting comfortably alongside operational property income.
For now, the strategy remains a private-market experiment. Whether Bitcoin can truly be pledged alongside physical property depends entirely on a fundamental shift in risk assessment by the major lenders that underpin the commercial real estate sector.