The Mortgage Market’s Bitcoin Experiment Has Already Begun

A US-based structured-credit firm is pushing TradFi boundaries by integrating crypto into real-world lending. Newmarket Capital, managing nearly $3 billion in assets, is pioneering hybrid mortgage and commercial loans that leverage Bitcoin (BTC) alongside conventional real estate as collateral.

Its affiliate, Battery Finance, is leading the charge in creating financial structures that leverage digital assets to support credit without requiring borrowers to liquidate holdings.

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Bitcoin to Reshape Mortgages and Real-World Lending

The initiative targets borrowers who are crypto-asset holders, including tech-savvy Millennials and Gen Z. It provides a path to financing that preserves investment upside while enabling access to traditional credit markets.

By combining income-producing real estate with Bitcoin, the firm seeks to mitigate volatility risk while offering borrowers a novel lending solution.

According to Andrew Hohns, Founder and CEO of Newmarket Capital and Battery Finance, the model involves income-producing properties, such as commercial real estate, paired with a portion of the borrower’s Bitcoin holdings as supplemental collateral.

Bitcoin is valued as part of the overall loan package, providing lenders with an asset that is liquid, divisible, and transparent, unlike real estate alone.

“We’re creating credit structures that produce income, but by integrating measured amounts of Bitcoin, these loans participate in appreciation over time, offering benefits traditional models don’t provide,” Hohns explained in a session on the Coin Stories Podcast.

Early deals demonstrate the concept, with Battery Finance refinancing a $12.5 million multifamily property using both the building itself and approximately 20 BTC as part of a hybrid collateral package.

Borrowers gain access to capital without triggering taxable events from selling crypto, while lenders gain additional downside protection.

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Institutional-Grade Bitcoin Collateral

Unlike pure Bitcoin-backed loans, which remain experimental and niche, Newmarket’s model is institutional-grade:

• It is fully underwritten
• Income-focused, and
• Legally structured for US regulatory compliance.

Bitcoin in these structures is treated as a collateral complement rather than a standalone payment method; mortgage and loan repayments remain in USD.

“Bitcoin adds flexibility and transparency to traditional lending, but the foundation is still income-producing assets,” Hohns said. “It’s a bridge between digital scarcity and conventional credit risk frameworks.”

The approach builds on a broader trend of integrating real-world assets (RWA) with digital holdings. In June 2025, federal agencies like the FHFA signaled in mid-2025 that crypto could be considered for mortgage qualification,

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However, private lenders like Newmarket Capital are moving faster, operationalizing hybrid collateral structures while adhering to existing regulatory frameworks.

Newmarket and Battery Finance’s work illustrates how Bitcoin and other cryptocurrencies can interface with TradFi as tools to unlock new forms of lending and credit.

Still, challenges exist. BeInCrypto reported that despite Fannie Mae and Freddie Mac’s plans to accept Bitcoin as mortgage collateral, there is a catch.

The Bitcoin must be held on regulated exchanges. Bitcoin in self-custody or private wallets won’t be recognized.

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This raises concerns about financial sovereignty and centralized control. Policy limits Bitcoin’s use in mortgage lending to custodial, state-visible platforms, excluding decentralized storage.

“This isn’t about adoption vs. resistance. It’s about adoption with conditions. You can play— …but only if your Bitcoin plays by their rules. Rules designed for control…As adoption deepens, pressure will mount for lenders to recognize properly held Bitcoin—not just coins on an exchange…Eventually, the most secure form of money will unlock the most flexible capital,” one user remarked.

Nevertheless, while this innovation is not a solution to housing affordability, it represents a meaningful step toward mainstream adoption of crypto in real-world finance.