Hello as always, and welcome to this week's edition of Overbit Insights. In our first story of the day, the second-largest mortgage lender in the United States will accept Bitcoin payments.
United Wholesale Mortgage, which made its public debut in January via a special purpose acquisition (SPAC) merger, announced plans this week to accept cryptocurrency for home loans, in what is being billed as a first for the national mortgage industry. "
"We've evaluated the feasibility, and we're looking forward to being the first mortgage company in America to accept cryptocurrency to satisfy mortgage payments," CEO Mat Ishbia said in the company's second-quarter earnings call on Monday. "That's something that we've been working on, and we're excited that hopefully, in Q3, we can actually execute on that before anyone in the country because we are a leader in technology and innovation."
The Michigan-based mortgage provider revealed to CNBC that it intends to begin taking Bitcoin, while UWM is also investigating Ether and other cryptocurrencies.
The quest for decentralised digital money comes at a time when crypto is being scrutinised from all angles in the United States. The $1 trillion infrastructure plan includes revised crypto tax regulations, and financial officials such as Treasury Secretary Janet Yellen, SEC Chair Gary Gensler, and Fed Chairman Jerome Powell have all lately spoken on whether to regulate cryptocurrencies.
Though it's unclear whether UWM will hold the cryptocurrency it accepts or convert it to fiat at the point of transaction, this is a massive step for Bitcoin and cryptocurrency adoption, as the finance world adds yet another on-ramp for the digital currency.
In our next story of the day, we'll discuss the rise of Coinbase's entry into an accumulation of digital assets on their balance sheet. Coinbase has announced that it will add $500 million in Bitcoin to its balance sheet and invest in a crypto asset portfolio. Analysts generally believe that this decision demonstrates Coinbase's commitment to the Bitcoin market.
Coinbase stated on Thursday that it would add $500 million in Bitcoin to its balance sheet and allocate 10% of its quarterly net income to a crypto asset portfolio. According to MarketsInsider, Mizuho analyst Dan Dolev, "I like that they put their money where their mouth is".
He told Insider that, even though cryptocurrency is crucial to Coinbase's operations, the company still runs primarily in fiat currency. This move modifies that marginally, though Dolev would want to see the exchange go a step further and charge client transaction costs in cryptocurrency rather than dollars. "That would signal even more commitment" to cryptocurrency, Dolev said.
In a Friday blog post, Coinbase CFO Alesia Haas stated that most of Coinbase's corporate financial activities - such as paying vendors and workers or investing company cash - are "heavily weighted" in fiat. However, she stated that Coinbase aims to set an excellent example by facilitating crypto acceptance and utility and that this investment is a step in that direction.
Haas stated, "We hope by incorporating more crypto assets into our own corporate financial practices, we can take another step towards building a more open crypto economy." and that "We believe that in the future, more and more companies will hold crypto assets on their balance sheet,".
However, the addition of crypto to Coinbase's balance sheet adds an extra layer of risk due to the volatility of crypto, and the company's stock price is already volatile since its listing earlier this year.
That's it for this week's edition of Overbit Insights.