As Gen Z finds it harder to enter the new home market, a claim has emerged that bitcoin is gaining attention as a new tool for building assets. With housing costs rising, using bitcoin as collateral without selling it to raise funds for buying a home is being discussed as an alternative.

On Sept. 20 local time, blockchain outlet Bitcoin Magazine cited comments by Hunter Albright of SALT Lending, saying weakening homebuying capacity is also changing how younger generations build assets. It said changes are emerging in home-centred wealth accumulation as Gen Z’s share of the new home market has fallen to below 5 percent.

At the core is using bitcoin as collateral rather than simply holding it. Albright outlined a structure in which borrowers take out loans secured by bitcoin to raise funds needed for a home purchase, such as a down payment, instead of tying up money for a long period.

A feature of this approach is that it can secure cash without selling bitcoin. It said buyers can keep their existing bitcoin holdings while purchasing a home, making it possible to hold both housing and digital assets at the same time.

The potential for bitcoin to be used as collateral within the existing financial system was also raised. Albright cited moves by Fannie Mae and Freddie Mac to begin recognising bitcoin, saying more cases are emerging in which digital assets are linking to traditional finance.

SALT Lending’s loan product was introduced as an example of this structure. Albright said SALT offers bitcoin-backed loans with a five-year maturity. Unlike traditional mortgages that tie up funds for long periods, the approach uses bitcoin as collateral to secure liquidity over a relatively short term.

The approach also ties to a view of bitcoin as a financial asset rather than an investment asset. Instead of selling bitcoin for cash, borrowers provide it as collateral and use loans to secure liquidity for home purchases or living expenses.

Even so, whether bitcoin-backed loans can solve Gen Z’s homebuying problem is a separate question. Risks include declines in collateral value from bitcoin price swings, demands for additional collateral and borrowing costs.

The discussion focuses on the possibility that, as rising home prices and weaker purchasing power change how younger generations build assets, bitcoin could be used as a new tool to secure liquidity before buying a home rather than replacing housing assets. Attention is turning to what role bitcoin-backed lending could play in the housing market as it combines with traditional finance.