We Study Billionaires - The Investor’s Podcast Network - BTC058: Bitcoin Real Estate Loans w/ Mauricio Bartolomeo & Adam Reeds (Bitcoin Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey, everyone. Welcome to this Wednesday's release of the podcast where we're talking about Bitcoin. On today's show, I talked to two gentlemen that captured news headlines before Christmas for a new loan product. They're bringing into the market that allows individuals to use Bitcoin to make a down payment on a house or even buy Bitcoin against some of the equity on their house. Their names are Maricio Bartolomeo and Adam Reeds. They're the founders of Leden, which is a Bitcoin lending and borrowing platform. And so without further delay, here's our discussion. You're listening to Bitcoin Fundamentals by the Investors Podcast Network.

Starting point is 00:00:40 Now for your host, Preston Pish. All right. So everyone, welcome to the show. Like I said in the introduction, I'm here with Mauricio and Adam. Gentlemen, welcome to the show. Thanks so much, Preston. Thanks for having us. Thanks for having us.

Starting point is 00:01:03 Great to have you guys here. So the first thing that I want to do is just talk about your story, because I'm sure you guys got one hack of a story. Maricio, I know you're from Venezuela. Adam, where are you from? Canada, I haven't moved too far, so I grew up in a small town outside Toronto. How did you guys meet each other? Western University, 15 years ago.

Starting point is 00:01:28 Okay, so 15 years ago, what did you guys study? What were you guys doing that made you want to start a business together? Because obviously, Bitcoin wasn't around 15 years ago. Yeah, we met. at business school at the University of Western Ontario. So I remember the first day coming over and seeing this enthusiastic guy that, you know, we're all opening up our fresh Mac computers and getting started and set up and happened to be sitting close by.

Starting point is 00:01:53 So obviously introduced ourselves and stayed in touch really from graduation back and forth. I'll let Maricio, of course, get into his story. But he was back and forth between Venezuela and Canada. I was, for the most part, mainly in Canada working and really just stayed in touch. Riesa, one of you jump in and talk about when you came back and then finished the story. I got the privilege, I would say, to do my university in Canada. Once Venezuela kind of started falling off a cliff for lack of a better description. Many families chose their most willing kid to go study abroad and hopefully help the family

Starting point is 00:02:27 if things went south. And I volunteered in my family and that's how I wound up in Canada with Adam. And we always used to joke around even as we were friends in university about how two people with such different backgrounds became such good friends because we actually joked at how different our upbringings were, yet a lot of our values and a lot of the things we didn't like were so similar. And so to us, that was always really interesting. And for me, what prompted me to do finance, which is the undergrad program that Adam is actually doing joint engineering and finance program at Ivy.

Starting point is 00:02:59 And I did my finance program and then went back for my master's. My obsession really with money came from growing up in Venezuela because you just grew up with so many questions in a system that's so broken. And I always thought that I grew up in an entrepreneurial family, my dad was an entrepreneur, so I wanted to have a business as well one day. And to me, trying to get something is to understand how that works. And to me, that was the case with money. I said, well, I can't really want to even seek out to make money if I don't know how money works

Starting point is 00:03:29 and what is money. And Venezuela, it's a very hard question to answer. And you just keep coming up with more questions, which eventually led us to Bitcoin. Let me ask you this. So I think what we're seeing in the global markets today, people are looking at the stock market and it just seems like it just keeps going up in nominal terms, as you guys well know. And they're looking at that and they're saying there has to be a correction some point. There has to be a correction.

Starting point is 00:03:54 And the three of us all have the opinion that it's the currency, this broke. Did you see something like this play out in Venezuela? where it almost seemed like the equity markets just kept going up. They just keep going up. 100%. And the crazy part is Venezuela doesn't have an equity market that's popular amongst its people. So what you ended up seeing was actually largely vehicles, cars. People would rave about buying a car, driving it for four years and selling it at a profit in Bolivar terms. And so the prices of assets just started getting completely out of whack in Bolivar terms. Anything that was a non-perish You know, at first it started with the highest quality asset, but when the capital controls came in, it went to cans of tuna, it went to rice, it went to what things.

Starting point is 00:04:41 Basically, it sends people back to the bartering system. And so you definitely see the currency breaks. And as more and more money gets injected into the economy and gets distributed more arbitrarily, this idea that you can make money through honest work disappears. dissipates because eventually assets get priced out of your reach. And so the idea of getting there with honest work breaks. And personally, that's why I think the middle class is such a mesh for a society because the middle class is that reachable place for anybody that feels like they want to climb up. And when the middle class disappears, which is the first class to go when the cantileone ticks on, that breaks this continuity of society. Basically, the breach becomes too far

Starting point is 00:05:36 from one end to the other, and people start thinking about not honest work. They start thinking about quick ways of, you know, absurd amounts of leverage, going, you know, through loops and bounds to try to get something that can 10x. And you start getting into this behavior that's very short term, almost very irrational. Wow. That's fascinating to hear the description of that because I don't know about you, Adam, but I'm looking at the market here just in the U.S. And it feels exactly like what you're just describing. The way I see this and the way I explain it to other people is basically if you have money is structured in a similar way, but it's structured as a series of dominoes

Starting point is 00:06:20 that fall back into the reserve domino, which is the U.S. The latter dominoes on the pile have never even shaken. The idea that this currency can be broken doesn't even cross the minds of most Americans or Europeans, frankly. But in a place, people like Venezuela, people like Argentina, people like Turkey, we have seen our domino's fall. We have seen money die. And what I think is fascinated about the way Fiat is structured and inflation is structured

Starting point is 00:06:47 is that I compare this to the boiling frog analogy. So you know this metaphor or this analogy where the frog, if you scratch, if you gradually, increase the temperature or the water of a frog, it'll boil because it won't notice that it's getting hot, but if you jack up the temperature, it jumps out. I think the same is true for a Fiat system and inflation. When you have inflation at 2 to 3 percent, the frog is just slowly boiling. It's just sitting in a jacuzzi thinking, no issue, right? It's just the water's just a little bit hotter, a little bit hotter. But what happened with COVID and what happens in places like Venezuela, when typically this happens because of a political event or some big crisis, is all of a sudden

Starting point is 00:07:25 you inject this massive amount of cash into the economy. And all of a sudden, you start seeing all these gaps and discrepancies around pricing and around events. And it makes you start questioning. It makes you start asking yourself how money works. And eventually, some people get to the answer that says, oh, they just printed. And when you have people making themselves collectively making that realization, well, if your cost of borrowing is lower than inflation, and you know they're printing it

Starting point is 00:07:54 To no end, it makes complete sense to borrow and buy, borrow and buy an asset that is not being printed. And I think to your point, that's a lot of the behavior we're seeing today. Everything's overpriced, but it's not going to get better. So this is what's so awesome. So you guys go and start this business. The name of it is Lendon. So L-E-D-N. We'll have a link in the show notes.

Starting point is 00:08:17 And you're just so well prepared for what this is all about. in your business, how did you guys, when you guys had your aha moment that you're going to build this, this company, how did that take place? Walk us through it. Yeah, so, you know, as Mauricio was coming back from Venezuela, this is really, you know, 2015 era. And he was so excited about at that time, Bitcoin mining and had done that for several years back and helped many people do that in Venezuela. And I was in the energy sector. So I was investing in solar winds and a bunch of other hydro projects in Canada, the US, Europe and a bit in looking at projects in that time as well.

Starting point is 00:08:58 So what I was seeing was yields going to zero. So starting really, I was doing that job since graduation, looking at different infrastructure projects globally, bringing in pensions and others. So you had to a situation where institutions were clamoring for these projects near the end. I just trying to get that. In the mining sector, the hardest thing to do was timing the sale of your Bitcoin. So you still had real world expenses as you were setting up infrastructure, you had to be able to time it.

Starting point is 00:09:26 And so as Mauricio was coming back, we decided to do some mining projects together. I was still working in the energy sector, investing in that asset class. And really from there, we obviously put some money together, set it up, and then always screwed up the time because we need to pay expenses. And then, you know, Mauricio was looking around. He said, okay, there's a few potential options in the market, but really what we should be doing is looking at how to finance their mind is, you know, let's look into that. So obviously now I'm seeing something that is infrastructure that we've done.

Starting point is 00:09:54 Riesio is seeing this huge demand for financing Bitcoin because at that point, admittedly, I was newer to the asset class and didn't really see the missing out of selling it and then watching it gain as much as he had. So kind of putting in, combining something that he knew, that he knew we never wanted to sell. My side of it was looking at institutions, seeing that they really had a clamoring for yield. And if we could put that together and say, okay, there's a huge group of capital over here that actually wants dollars, wants to lend against, wants to lend dollars, wants to return in dollars.

Starting point is 00:10:25 Bitcoiners never want to sell their Bitcoin. If we can marry that two concepts, we'll have a pretty attractive yield product. And so putting that together. And the other interesting thing was kind of through that conception point is the conversations around an asset class as it matures changed dramatically. And what I was seeing was a little bit of a deja vu moment in the conversations around Bitcoin. So everyone was talking about the tech, everyone was saying it's blockchain. not Bitcoin.

Starting point is 00:10:52 How does the tech work? Every time you explain it, you're always talking about tech, tech, tech. The same thing happened when renewables renew. People said, well, how does solar panels work? Well, they last 20 years. And I'm talking about very two different asset classes, but what's similar about the two evolutions is the maturation of the questions and the intelligence of things asked about that asset class.

Starting point is 00:11:12 And now we're seeing that again. 2017 was about the tech. You know, 2020 was about the economics of this and the real value of something is the the scarcity of it and really true the true value of Bitcoin. So kind of that evolution is, if we got in early and we figured that we structured something right, eventually the smart money would come and it would drive the cost down of financing. So that's what we're excited to see, you know, structured something well and now watch big institutions come in and really try to bring their large balance in it and finance it and bring the whole thing together. So that was

Starting point is 00:11:44 really the marrying of those two things and trying to put together the marrying of two different world. So Pierre O'Shard termed this a speculative attack, which is what Michael Saylor has done. So your company is basically like the speculative attack company of Bitcoin. So explain to our audience what your company does in layman's terms. It's a very simple concept. So we let people place their Bitcoin as collateral so they can borrow a dollar. against it and not have to sell their Bitcoin. And you can think of it in very simple terms as a mortgage for your Bitcoin. It is a loan that you get.

Starting point is 00:12:29 You're still the owner of that Bitcoin. The value of that Bitcoin is your appreciation or loss. Like any kind of gain or change in the value of that asset is still yours. And all we're doing is we're just allowing you to finance or access financing based on the value of that asset. That is our flagship product. That is your Bitcoin bank loan. It is our most popular product today.

Starting point is 00:12:49 And those funds can be advanced in cash or stable coins or USC if you want. We also let people earn interest on the Bitcoin they already have. So it's our Bitcoin savings account and that just pays you an interest rate for having the balances. We lend it out to institutions and we collect the spread. And you can now, we have savings accounts in both USC and Bitcoin and you can move between Bitcoin or USC to control your exposure to one or the other as you want. Now, what makes you guys a little bit different than some of these other lending, borrowing platforms that are out there is you guys have incorporated real estate into that part of the collateral, correct?

Starting point is 00:13:29 Yeah. So the product that we just announced last week is a Bitcoin mortgage. So what that product is, it allows you to buy a property worth the same value as your Bitcoin stack. So if you have a million dollars worth of Bitcoin, you can use the Bitcoin mortgage to purchase a million dollar home. And essentially, that product is different than the straight Bitcoin back loan. It has obviously some tradeoffs, I guess, and some benefits for a few parts of how the product works. But we're happy to get into those.

Starting point is 00:13:58 But in essence, the genesis of that product came because a lot of our existing clients were using our Bitcoin back loan to buy houses in cash. And essentially, they kept coming back to us because a lot of Bitcoiners are very Bitcoin wealthy. but they don't, in the eyes of a bank, they're not necessarily that wealthy because the bank doesn't treat Bitcoin as an asset. And so because so many Bitcoiners use us for so many of their financing needs, a couple of them, several of them came with the same request. And when we started working with them, we saw a lot of people around their own circle getting really excited about the product. And so that we clued into the fact that there was this big demand for Bitcoiners to purchase real estate. The result of the result of the result.

Starting point is 00:14:42 also after the announcement kind of speak for themselves. We're very, very happy with so far the feedback. So walk us through the structure of this, because when you start getting into the interest rates that are associated with borrowing money against your Bitcoin, the rates are extremely high, especially compared to traditional finance. So a person can go out today. I don't know what the mortgage rates are right now, but, you know, they're really low. And I suspect I don't know what the rates are for this product, but I suspect they're at least twice or maybe even triple the amount in interest rate. So walk us through what those numbers are and then talk to us a little bit why somebody would be incentivized to go in this direction opposed to a traditional loan out

Starting point is 00:15:29 of traditional finance. Yeah, if I can say, so maybe first off, it's helpful to walk through how the traditional or our traditional Bitcoin back loan works and then talk about the evolution of that. So the Bitcoin back loans, if you had $100,000 of Bitcoin, we'd lend you $50,000. You still maintain ownership of the $100,000 of Bitcoin, whether the price goes up or down, in dollar terms, that exposure is yours. And then if the Bitcoin rallies, you can reset the loan, kind of take it so that your ongoing loan to value remains at 50%. And on the downside, what we always have to balance is we obviously have to fund that capital. And so the tricky part for the borrower is the top up that's required if the price of Bitcoin declines in dollar terms

Starting point is 00:16:14 and you have to add. So this can be a nerve-wracking concept because you have to get comfortable that the price is moving all the time. The price can move at unfortunate times in the night. And we have to do our best and a lot of the evolution of the product is making sure we provide as much notice as we can, but still in the absolute scenario, provide the right liquidation terms so that we can actually have dollars to lend against. So that balance has been an evolution that not just let in, you know, many, many companies in the space have kind of worked through. And so what the mortgage does is when you instead just lend someone dollars that they can do anything with, and instead say, hey, what if you use those dollars to purchase real estate?

Starting point is 00:16:50 And what would you be okay with us taking a security position on that real estate as well? Now we have one asset over here, that's the Bitcoin, a collateral, that is moving, but quite liquid. And we have another asset that's real estate that's stable, but not as liquid. So when we combine them and we look at the financing package today, together, it allows us to provide a much more generous term to add additional Bitcoin. So we still require that 50% loan to value, but what we're doing is providing a lot more leniency as far as the timing of adding additional Bitcoin. So that's the real value prop. And in addition to that, we can also lower the interest rate. So the interest rate that we've gone to market with in the pilot is really midway in between what a traditional real estate loan would be and what the Bitcoin back.

Starting point is 00:17:34 loan would be. And this is really subject to market conditions as we get more. So really, we hope over time we can pass on as much savings as we can as more peace comes into it. But really, it's blending all of that. And then the final value prop is doing everything in one place. It's not an unknown fact that most Bitcoiners don't love, you know, walking into Bank of America and asking for a loan. There's a reason that they got into Bitcoin. There's some frustration with the traditional financial system. So I think the benefit of being able to do things all in one place provide some additional value as well. For me, looking at this from the outside, and you guys got to correct me if I'm wrong here, it seems that the person who would want to do this would be

Starting point is 00:18:15 somebody who has a substantial or half of their house paid off or maybe the full amount of their house paid off, and they want to borrow against that in order to buy Bitcoin. Is that something that you guys offer? And if so, is that what you're seeing? playing out more often than not versus the other scenario that we were just talking. It's funny you mentioned that because, so we've received that feedback so many times. In essence, the product, the pilot, the way it was structured was clients had Bitcoin and wanted to purchase a house. And that's the way the product is structured for the pilot. But what we quickly realized was there was a huge demand for people that outright own their

Starting point is 00:19:01 homes and would like to buy the same amount of Bitcoin. So we're already working on that. And it should be essentially, I think, ready, perhaps not immediately when the V1 mortgage hits, but within months, most likely of it being announced. And the other piece I wanted to add, just to frame the conversation around the rates for traditional mortgages, because I think a lot of people talk about, you know, these 2% rates, 3% rates, as if they're very attainable for anyone, walk into a bank of America and get 2%. Many people, I think incorrectly think of a mortgage as a loan against a house. A mortgage is actually a loan against your cash flows or your income that is backed by the

Starting point is 00:19:43 house. So if you show up and you try to buy a $5 million house and you make $20,000 a year, no bank's going to give you that mortgage. And so what many Bitcoiners face and the challenges that many people in the crypto space face is that, A, they're either freelancers. They don't really have a steady stream of income. They don't really have a steady or long-term employment history. And the other one is a lot of these people have made a lot of Bitcoin or digital assets

Starting point is 00:20:11 over the last few years. So rightfully, many times they're entrepreneurs or they are, you know, they just don't have that cash flow stream that allows them to buy the house of their dreams. Many times their current stream of cash flows will allow them to buy, you know, a house that's half of what they want. And so by tapping into the Bitcoin mortgage, they can now purchase or use some of that Bitcoin to purchase the house they want. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer.

Starting point is 00:20:42 You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year, bringing together activists, technologists, journalists, investors, and builders from all over the world, many of them operating on the front lines of history. This is where you hear firsthand stories from people using Bitcoin to survive currency collapse, using AI to expose human rights abuses, and building technology under censorship and authoritarian pressures. These aren't abstract ideas. These are tools real people. are using right now. You'll be in the room with about 2,000 extraordinary individuals, dissidents, founders, philanthropists, policymakers, the kind of people you don't just listen to but end up having

Starting point is 00:21:37 dinner with. Over three days, you'll experience powerful mainstage talks, hands-on workshops on freedom tech, and financial sovereignty, immersive art installations, and conversations that continue long after the sessions end. And it's all happening in Oslo in June. If this sounds like your kind of room, well, you're in luck because you can attend in person. Standard and patron passes are available at Osloof Freedom Forum.com with patron passes offering deep access, private events, and small group time with the speakers. The Oslo Freedom Forum isn't just a conference. It's a place where ideas meet reality and where the future is being built by people living it. If you run a business, you've probably had the same thought lately. How do we make

Starting point is 00:22:21 AI useful in the real world, because the upside is huge, but guessing your way into it is a risky move. With NetSuite by Oracle, you can put AI to work today. NetSuite is the number one AI cloud ERP, trusted by over 43,000 businesses. It pulls your financials, inventory, commerce, HR, and CRM into one unified system. And that connected data is what makes your AI smarter. It can automate routine work, surface actionable insights, and help you cut costs. while making fast AI-powered decisions with confidence. And now with the NetSuite AI connector, you can use the AI of your choice to connect directly

Starting point is 00:23:00 to your real business data. This isn't some add-on, it's AI built into the system that runs your business. And whether your company does millions or even hundreds of millions, NetSuite helps you stay ahead. If your revenues are at least in the seven figures, get their free business guide, demystifying AI at netsuite.com slash study. The guide is free to you at netsuite.com slash study. NetSuite.com slash study. When I started my own side business, it suddenly felt like I had to become 10 different people

Starting point is 00:23:32 overnight wearing many different hats. Starting something from scratch can feel exciting, but also incredibly overwhelming and lonely. That's why having the right tools matters. For millions of businesses, that tool is Shopify. Shopify is the commerce platform behind millions of businesses of businesses around the world and 10% of all e-commerce in the U.S. from brands just getting started to household names. It gives you everything you need in one place, from inventory to payments to analytics. So you're not juggling a bunch of different platforms.

Starting point is 00:24:04 You can build a beautiful online store with hundreds of ready-to-use templates, and Shopify is packed with helpful AI tools that write product descriptions and even enhance your product photography. Plus, if you ever get stuck, they've got award-winning 24-7 customer support. Start your business today with the industry's best business partner, Shopify, and start hearing sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify.com slash WSB.

Starting point is 00:24:43 All right. Back to the show. Have you seen a scenario where people are taking a down payment or paying off a quarter of the house through a Bitcoin loan because they obviously don't want that high interest rate for the full loan amount that's helped them secure a loan, a traditional loan, by borrowing against some of their Bitcoin for a portion of it. How does the bank, or at least maybe your experience, how has the bank kind of dealt with that? Because I know when people are trying to secure loans, a lot of the times, they're like, well, we don't want to see any

Starting point is 00:25:15 $50,000 or $100,000 last minute inbound checks to the account. Because then that warps their perception of your cash flows. To your point, Maricio, on how they're valuing your ability to pay it back. Are you seeing customers go in that direction? Yeah. So we actually did see that a few times. And some of those experiences was what led us to this product. Because what we saw actually a couple times, their clients were coming in and taking

Starting point is 00:25:44 large loans, like a million dollar plus loans. And they, you know, some of them openly said that it's going to be to buy real estate. And some of them even said, hey, I'm going to look to refinance part of the house and I'm going to be repaying a portion of this loan in a few months' time. And we said, that's great. You know, we'd love for you to get a more efficient cost of capital if you can. But immediately, that clued us in into the fact that in these circumstances, some of our borrowers have the cash flows to essentially go support the mortgage of the house that they wanted to buy in the first place. A lot of our clients were not in that camp. And they said, I really would like you to do the mortgage entirely.

Starting point is 00:26:20 I don't want to deal with the bank. I really don't. And so we obliged. Exactly. We said yes. And it's interesting because with a lot of these loans, it's just so convenient. Because from your perspective, it's fully backed, right? Like with liquid tokens, it's backed on a 24-7 market.

Starting point is 00:26:40 So, like, you're good. Like, you can push them whatever funds, USDC or whatever. immediately, and you know that they're good for it because it's sitting right there on a 24-7 market over-collateralized. And I think that that's a part for people that are listening to this. It's hard for a lot of people to wrap their head around something that's over-collateralized because in traditional markets, you just don't see something like that. How are you guys thinking about the storage of these deposits that people are making? So if I bring some Bitcoin to you, I make a deposit, I'm taking out a loan against it. Are these shared,

Starting point is 00:27:15 multi-sig accounts? Are you guys the ones that are controlling the keys? How do you think through that problem? How do a lot of your customers think through that problem? I'm just kind of curious to hear some of your thoughts on it. The way that the product is structured right now is we are a custodial company. Like we know, the lending product that we offer is a custodial product. We do hold the keys for the collateral for our loans. And the way the mortgage is structured, we will also hold the keys for the collateral for the Bitcoin on the mortgage product. What we are looking into as future iterations of the product is giving the clients the option to basically have their Bitcoin sit on chain so that they can essentially monitor their

Starting point is 00:27:56 bitcoins that is being part of the collateral for that loan. Obviously, there are some mechanical changes into that. There might be some price differences as well in the two options, just because the cost of capital, frankly, is different in the two forms of financing. But I think that we are always in the of the view that we, you know, if this is something our clients want and it's important for them, we want to give them the option to have it. And if the client, you know, decides that they would like to, you know, use one or the other option, well, that's their prerogative, which is there to kind of do offer whatever they prefer.

Starting point is 00:28:32 You guys mentioned that you use USDC as a stable coin. Why did you guys choose USDC versus some of the other stable coin? that are out there? Obviously, the most popular stable coin in forest circulation is tether. Tether, I think depending who you speak to, everyone has a different view of tether. But from our perspective, we are regulated entity in several jurisdictions. And the regulators do continue to have issues with tether. So in order to move forward a regulatory posture, we had to make sure to not support tether at this time. The other piece is the one-to-one peg just simplifies it. I think especially for those that are newer to the asset class. We do see stable coins as what you can call a gateway

Starting point is 00:29:13 drug. So it's maybe easier to understand digital dollar than it is to understand Bitcoin. And then once you get into the digital dollar, understanding Bitcoin is a natural evolution from that. So we just thought, you know, if you can say it's fully backed by dollars and show to one to one peg and it'd always be priced at that. It's just far easier to explain. We really got into supporting stable coins because we were having challenges sending money to a lot of our clients internationally, especially in Latam. Unfortunately, for some of our Latam clients, you're almost guilty until proven innocent when it comes to income hitting your bank account. So a lot of the times, a client saying in Colombia would have to defend that the $5,000 that just hit their account

Starting point is 00:29:52 was not income. It was actually a loan. And that was part of our evolution of providing all of our documentation in Spanish as well to support not only understanding of the products, but to support documentation and making sure that they could explain to different authorities that it is what it is. So that was really why we supported stable coins in the first place. And then to now, it just makes it easier to support many different things in the ecosystem. That was an interesting comment there about it, not being income in it, it was actually a loan. One of the questions that I saw on Twitter, a person asked, is the interest deductible for income tax?

Starting point is 00:30:26 So we can't provide tax advice. You have to consult with your tax profession. But in many jurisdictions, when you take out a loan and you use the proceeds to reinvest in a business, they can be tax deductible. So you can confirm with your tax professional. All right. I think we know what the answer was there. Mauricio, you passed your legal advisors would be very proud of you. When in the United States? When are you guys going to, because you guys are just in Canada today, correct?

Starting point is 00:30:59 So a lot of our products are available in the U.S. as well. So we operate in many states. We have to follow state by state lending regulations. As far as the mortgage itself, the first pilot mortgages that we work through this year are in Ontario, Canada. But we're receiving applications and inquiries from all over. So we definitely hope to support the U.S. as quick as we can next year. So we don't have exact time frames, but expect it, I would say, you know, mid-2020. too. Hey, one of the things that I found interesting on the site is the term, the duration of the loan is way shorter than I would imagine people who are not familiar with the product are. It's two-year term. Talk to us about why the term is so short and whether that's important, not important to the person who's borrowing, because they can just roll it over again. They are going to get a different interest rate. But talk to us a little bit about that. So it's really matching 10 years. of capital. So today, as we've kind of talked about throughout this, we really have Bitcoin back capital. So what we've been doing and our finance teams have been doing is as we've been

Starting point is 00:32:05 developing the mortgage, really expanding our tentacles as far as what sorts of capital we're tapping into and making sure we can match those 10 years. So what we never want to do is overcommit on anything. So everything is matched. Actually, part of the ethos of what we do with Leden is we try to keep the behind-the-scenes framework super simple. So when we launch a product, we match everything up and we're really conservative on duration. So that's that. So we don't have, you know, 30 year capital today in Leibed, but as things evolve, we expect to have this. So, you know, just when you sit down for a traditional mortgage, you can select, I want to, you know, two-year fixed or five-year, five-year variable term, we definitely would like to support all those

Starting point is 00:32:43 different variations of the mortgage product to make sure we can match this. This is really just, hey, let's get going. Let's keep it simple to get the product out there. And then let's really, you know, innovate when we, by listing to our cost. clients and what they want. How are you guys just seeing growth from when you guys started to today? Is it exploding? Is it a little stagnant? I'm just curious to hear your thoughts on the growth in this space. There's so many opportunities. And I think that's what makes it exciting to work in this space is there really is no competition because that you have really smart people. So there's competition in the sense that other people are working on similar ideas in a similar space. But the

Starting point is 00:33:23 mindset you have is all about growing the pie just because there's so much interest coming in so quickly. You know, everyone's focused on expanding that and serving as many people as they can instead of taking taking from others. So that's been great. I mean, I think just on this specific mortgage product, Bitcoiners surely want property. I think we were blown away. You know, Marisa actually, you know, tried to take a couple days off last week and couldn't because we were just so overwhelmed with the demand and excitement of the program that we've been advancing things, you know, even faster than we thought we'd have to. What excites you guys the most moving forward here?

Starting point is 00:34:01 That's a great question. I'm excited, as I was mentioning to you earlier, because I feel like there's been a sort of collective awakening by many people around what money is. And I think that that you're seeing it around the world, and it's not just in an investor markets. In the U.S., it's a very big problem because it's been the, I believe, the economy that's injected the most cash into its system over the last 12 months. And so typically, people of the U.S. are never worried about inflation. But to have the U.S. now worried about inflation, to have the types of things that you're seeing in Europe where it's just

Starting point is 00:34:37 going completely out of whack, and you're seeing this sort of collective awakening of people saying, Fiat is not an instrument for saving. This is the terrible instrument to build wealth. And I'm going to opt out of it and I'm going to go into Bitcoin and I'm going to go into real estate. And so what I'm most excited about is being part of that massive wave and allowing the infrastructure that lets people do that. I say this sort of jokingly, but the fact that somebody in Medellin can take a sliver of their paycheck and hedge inflation with the same instrument that Michael Saylor is using is incredibly empowering, incredibly. And so I don't think that's a trend that's going to stop anytime soon. Any plans to go to Europe? Yeah.

Starting point is 00:35:21 So when we added Spanish and Portuguese to the platform to support Latam, naturally we received decent amount of applications from Spain and Portugal. So we've seen quite a bit of spillover into Europe on different products. So we're there in some basis. I think what we'd love to do is be as deep in Europe and other places as we are in Canada, the U.S. and Latam. The other thing that I think really excites us about the space overall is it's unbelievable, even though it's early, how developed systems are in the U.S.

Starting point is 00:35:55 for on ramps on Bitcoin specifically and other Bitcoin services compared to the rest of the world and even Europe. So there's so much opportunity everywhere else in the U.S. as well, but there's just a lot more to go, I think, in other places. And so that's what really excites us is the world's a really big place. and the U.S. has had the luxury of moving a bit faster, but I think the opportunity, at least that we're focused on, is making sure that other places can grow just as quick, too. How does the appraisal for the house value work? Is it similar to, you know, when a person

Starting point is 00:36:29 buys a house and they're dealing with getting a traditional loan? Very similar, yes. So essentially it's the same process. It's the typical real estate appraisal as if you were going to a normal mortgage process through a bank. Part of the things or something that interested clients should know about the loan is that basically Lenin has the right to reassess the value of the property at the end of the first year. And essentially, that would be the way that we can reset the LTVs of the loan if there have been any moves, any changes in the value of the real estate and of the Bitcoin. The idea here is that if Bitcoin has rallied and you know, you're over collateralized in the

Starting point is 00:37:09 Bitcoin portion, that one year mark allows us. both the borrower and the lender to reset the levels to their 50%. So if a person has that in hand that's been done, I'm sure you require a certain timeframe like within the last month or something. But if they have that valuation in hand, how long does it take them to go through this process to, let's say they want to borrow $50,000 or $100,000 with real estate involved? The process today, it's not automated through the platform. It's a manual process that is done through our key account managers.

Starting point is 00:37:42 So each one of the clients that is going through the application process has a designated account rep that helps them go through the appraisal process and the full application. Right now, I think it's a bit too early for us to tell just because we're going through the pilot. But I think once everything is in place, it should be a fairly straightforward process, at least on this structure of the loan. As we start getting into lower interest rates, longer terms, and traditional capital gets introduced into the mix, the underwriting process might change.

Starting point is 00:38:12 a little bit and it might become a little bit longer. But the idea at the start is to have this be almost as frictionless as a Bitcoin back loan for you to be in and out as simple as hopefully a day or a couple hours. For today for B2X loan, which is a loan to buy more Bitcoin on that is platform, you can KYC in two minutes, you can send your Bitcoin on the next block in 10 minutes. So you can literally have a B2X down in 12 minutes. With us, the only really timeframe is the appraisal. That's a piece too where we'd love to innovate in the future like appraisals are.

Starting point is 00:38:42 are okay, but they're a little bit, you know, there's definitely room for technology innovation there to make that process faster. And the big thing that takes a lot of time at the banks to go through a traditional mortgage is all the income verification, W2 records, all of your tax, and putting a point together that package. That doesn't exist with our Bitcoin mortgage. It's strictly, what's the home value and how much Bitcoin do you have and making sure that your KYC properly, so we're following regulatory requirements. And so after that's done, I could see us shortening up the timeframe significantly and literally making it, you know, 20, 24 to 48 hours if everything was altogether.

Starting point is 00:39:15 What concerns you guys the most? I guess one thing that I think is maybe the elephant in the room, but perhaps not necessarily depends on who you ask. But I think that Bitcoin's weaving its way into politics, whether it's El Salvador, whether it's the U.S., whether it's, you name it, politicians are talking about Bitcoin. My concern is that if we get Bitcoin pinned to one particular party and not the other, so Bitcoin becomes X party supports Bitcoin, but Y party doesn't support Bitcoin. And we go into this, for example, in a sort of a two-pole system, you would potentially

Starting point is 00:39:56 have this situation where you have four years pro-B Bitcoin, four years anti-Bitcoin, four years anti-Bitcoin, and you can get into it like one hand building, the other one breaking down. And so I think that, I see that as a potential risk as in some countries, like hopefully politicians can be bigger than this and see the light above it, kind of work for the best interests of the constituents. But I think that politics is one of those things that it's going great or it's going absolutely terrible. And I've seen it go from great to terrible like that.

Starting point is 00:40:27 And so that's one thing that is at the top of my, I'm very jaded by politics. So I'll caveat with that. I think most are getting there with you. I noticed that it's just Bitcoin. There's all these alt coins out there. How are you guys thinking about that as you guys structure your platform and what you're accepting as collateral for very substantial sums of money? Yeah, I think we have a philosophy at Levin that the best restaurants have the smallest

Starting point is 00:40:56 menu. So we're trying to make sure that we limit choice, not to limit a client choice, but just to make sure that we don't clutter things up for no reason. about a lot of thought. I think we saw some of the other lending platforms at different tokens like, you know, XRP and then ran into not only regulatory issues, but client issues when they couldn't liquidate collateral and such. So we definitely have no plans to support, you know, a whole bunch of different all coins. We have considered adding, you know, Ethereum and such to the platform, but we haven't formally announced anything yet. And we're actually still working

Starting point is 00:41:28 through that on our roadmap. Our next piece that we're working through is adding feed-on ramps to the platform. So adding the ability to more easily send and receive dollars to make sure that, you know, obviously it's still a fairly simple thing to do in the U.S., but it's a lot harder to do in other markets. So we want to make sure we support that first, and then we'll see how things grow from there. But the first part is making sure the products we have are robust. We have a lot of innovation that we want to do on the loans first. And then, you know, we'll see how next year goes and how, you know, different popularity of different assets shakes out. When I'm looking at the type of person that would just be taking out a standard loan against their Bitcoin and paying a higher rate than what they would going through traditional finance, the only thing that really kind of just makes a lot of sense to me is they just don't want to deal with the admin bureaucracy and they just want access to working capital to make a quick payment, pay it back a month later or two months later. And the hassle that was saved, like far outweighed.

Starting point is 00:42:27 what they would have had to have gone through and prove, hey, I have this much free cash flows for my business, this past, you know, the past three years and go through that whole process, right? Like you said, they can literally take out a $300,000 loan in 12 minutes or whatever it is, and then pay it back a month later. And it's just too easy, right? Is that your typical person that's using those types of services? Or what would you say is the typical person that's using the service? Because the interest rate we're talking about is what, six, seven percent?

Starting point is 00:42:57 for the scenario that is just described to go borrow $300,000? Yeah, so the interest rate owners are Bitcoin back loan without real estate is 9.5% today. So that's ebbing and flowing depending on where it is. So I think a couple things on that. So for the person that owns really only liquid Bitcoin assets today and doesn't own really any other substantial asset that wants to buy a home. Our recommendation for that is if you're strictly focused on rate, we will not compete on the Bitcoin back. mortgage today on a blended rate basis with a traditional mortgage, especially where rates are immediately. We hope to be able to, and let's say, you know, six to 12 months from now, but the product

Starting point is 00:43:37 that we have immediately is not a 2% product. So our recommendation is to still use Lennon, take a Bitcoin back loan for the down payment on the home only, and then source a traditional lender. If you want the convenience that some of our clients have done, source the whole thing through Lennon, tie up a bit more Bitcoin that you'd like, and then, as you just illustrated, repay the portion of the loan, refinance it with, there's no repayment fees with letting so you could refinance it and pay it down without any issue to do that. So that's probably for the person that's rate sensitive and is planning to the exact, you know, penny, that's the recommendation we would give.

Starting point is 00:44:14 But keep in mind, you know, what we were talking about earlier is do you have to have income to qualify for that? You're still going to have to show your W2 is substantial enough to support that traditional loan. A lot of clients are coming into us that are Bitcoin entrepreneurs. for traders, have done other things, they may be worth millions, but they don't have that cash flow that the bank mortgage can support. In that scenario, the Bitcoin mortgage makes sense for you. Let's take a quick break and hear from today's sponsors. No, it's not your imagination.

Starting point is 00:44:42 Risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a stock two or running an enterprise GRC program, VANTA keeps you secure and keeps your deals moving. Instead of chasing spreadsheets and screenshots, VANTA gives you continuous automation across more than 35 security and privacy frameworks. Companies like Ramp and Riter spend 82% less time on audits with Vantta. That's not just faster compliance, it's more time for growth. If I were running a startup or scaling a team today, this is exactly the type of platform I'd want in place.

Starting point is 00:45:30 Get started at vanta.com slash billionaires. That's vanta.com slash billionaires. Ever wanted to explore the world of online trading, but haven't dared try? The futures market is more active now than ever before, and plus 500 futures is the perfect place to start. Plus 500 gives you access to a wide range of instruments. The S&P 500, NASDAQ, Bitcoin, gas, and much more. Explore equity indices, energy, metals, 4X, crypto, and beyond. With a simple and intuitive platform, you can trade from anywhere, right from your phone.

Starting point is 00:46:08 Deposit with a minimum of $100 and experience the fast, accessible futures trading you've been waiting for. See a trading opportunity, you'll be able to trade it in just two clicks once your account is open. Not sure if you're ready, not a problem. Plus 500 gives you an unlimited risk-free demo account with charts and analytic tools for you to practice on. With over 20 years of experience, Plus 500 is your gateway to the markets. Visit Plus500.com to learn more. Trading in futures involves risk of loss and is not suitable for everyone. Not all applicants will qualify.

Starting point is 00:46:46 Plus 500, it's trading with a plus. Billion dollar investors don't typically park their cash in high-e-eeled. savings accounts. Instead, they often use one of the premier passive income strategies for institutional investors, private credit. Now, the same passive income strategy is available to investors of all sizes thanks to the Fundrise income fund, which has more than $600 million invested in a 7.97% distribution rate. With traditional savings yields falling, it's no wonder private credit has grown to be a trillion dollar asset class in the last few years. visit fundrise.com slash WSB to invest in the Fundrise income fund in just minutes. The fund's total

Starting point is 00:47:31 return in 2025 was 8%, and the average annual total return since inception is 7.8%. Past performance does not guarantee future results, current distribution rate as of 1231, 2025. Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income funds prospectus at fundrise.com slash income. This is a paid advertisement. All right. Back to the show.

Starting point is 00:48:00 So how much are you guys paying for a person making a deposit? What's the interest rate there? It's a six and a quarter on the first half of Bitcoin and two and a quarter of balances above that. And then for the USC savings account is 9.5% APY. So when I'm thinking of those interest rates and I'm looking at what? what traditional finance interest rates are, let's just say it's 3%, right? Let's just say a person wanted to deposit a million dollars with you guys. The interest that's being received off of that deposit, assuming it can hold its million

Starting point is 00:48:34 dollar valuation, is covering the loan interest payments, right? If the person would go out and borrow a million dollars in traditional markets at 3% to buy a house, or they could deposit, I guess what I'm saying is they're doing both, right? They're getting the traditional loan for 3%. They're making it deposit with you, which is going to pay them higher than that payment that they have to make to the bank. Is there something in the future where you guys are going to try to smush these two things together to allow the person to basically deposit their Bitcoin and you guys basically

Starting point is 00:49:06 make the payment to the traditional lenders? I think it's where the structure of the market is. So right now, the yields that are available on Bitcoin, so we lend Bitcoin, the market for institutional lending is around 3 to 4% today. So that level is what you can pay on Bitcoin. There's a tier system that we do. So we pay six and a quarter on the first Bitcoin. We pay two and a quarter on the amount above that. So that blended rate allows us to keep those rates sustainable. I think that the comparison is really on the dollar side. So on the stable coin side, we paid 9%. As we mentioned earlier, our Bitcoin back rate is 9.5% plus we have an aminthi on

Starting point is 00:49:46 there. So that makes the spreads of the dollar side comparable. But I think really what we'll see in the future is, hey, you know, maybe one day the rate on Bitcoin yields will be higher than we're in the dollars, just given the dynamics of it. Right. But in the current market, there's more people, the way I always think about it is the reason dollars are higher in the space is I think if you said to someone who's familiar in the space, do you want to lend dollars, what's my risk, Bitcoin? Well, why wouldn't I just own Bitcoin? Bitcoin went up, you know, X percent this year. So I think the supply demand curve is really tweaked on dollars in the space compared to Bitcoin because a lot of people just want to hold Bitcoin. Yeah. Boy, oh boy, it is getting exciting.

Starting point is 00:50:27 And I mean, just listening to you guys, describe the different rates and then you're looking at the traditional system. You can see how as this matures in the coming five years, I just can't imagine the growth rate and how this is going to just, it's already turning into a monster. Like the The stable coin growth rate is just, I think it's blowing the hair back on traditional finance, the amount of coins that are being minted and being put into circulation because of the demand for immediate clearance 24-7. It's just wild. Not to mention it is banking, it is actually banking a lot of a bank. Ex-recent gas fees issues that we've been having because transparently right now you can't really use stable coins on Ethereum.

Starting point is 00:51:13 Like a normal human cannot, like cannot afford to use them for their everyday life. But six months ago, a little bit, and right now they remind you, I have heard from people of places like Venezuela that are using stable coins on things like Solana. So people find their way through innovation to solve their own needs. And it's remarkable. It's not fancy, you know, software developer engineers. I'm talking like real people are actually. going out and reaching and finding a different option because they just don't want to pay 100 bucks

Starting point is 00:51:45 and fees. Barring that aside, what I think is fascinating about stable coins and hyper-dollarization in some ways is that it is actually, so if you look at some of our clients, we have clients that live in sort of remote parts of Mexico. And for them to go open a dollar bank account somewhere is a day's trip. Or sometimes they don't even have a way to get there. And many times these people found their way through Bitcoin. They bought it in our local P2P market and they want to access some of our services. And our experience, I think, speaks a lot to what Stable Coins is doing for people because it came from clients asking us to fund their loans as Stable Coins. And these were clients largely in Latam. So over 40% of our loan clients are all in Latin

Starting point is 00:52:30 America. And so it is truly giving people in very far-reaching parts of the world access to a stable savings account or a stable savings instrument, which I know might seem trivial for anyone that grew up in Europe or Canada or the U.S., but a dollar is the almighty dollar anywhere outside of those three countries. And people will, you know, go to great lengths to not hold their local currency and hold dollars instead. Gentlemen, this was a blast. I learned a ton. Give people a handoff where if they want to learn more about your company, they want to learn more about you, where they can find it. You can follow us at Hoddle with Leden.

Starting point is 00:53:15 That's our Twitter handle. And for myself, you can find me at Cryptonomista. And you can also check out the Bitcoin Economic Calendar, which is a newsletter that we write. And it's actually free for clients and non-clients as well. But yeah, that's where you can find us or myself. Adam, you can give yours. Yeah, sure. Mine's pretty easy.

Starting point is 00:53:35 It's just my full name, Adam Reed, on Twitter. and our website is LEDN.I.O. We'll have links to that in the show notes. Gentlemen, thank you so much for making time and coming on the show. Thanks so much, Preston. Appreciate it. Thanks. If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application

Starting point is 00:53:53 you use. Just search for We Study Billionaires. The Bitcoin-specific shows come out every Wednesday, and I'd love to have you as a regular listener. If you enjoyed the show or you learned something new or you found it valuable, If you can leave a review, we would really appreciate that. And it's something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening. And I'll catch you again

Starting point is 00:54:20 next week. Thank you for listening to TIP. To access our show notes, courses, or forums, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by the Investors Podcast Network. Written permissions must be granted before syndication or re-broadcasting.

We Study Billionaires - The Investor’s Podcast Network - BTC058: Bitcoin Real Estate Loans w/ Mauricio Bartolomeo & Adam Reeds (Bitcoin Podcast)

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.