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Do banks consider your Bitcoin holdings when you apply for a loan?

A physical Bitcoin 'coin'

Cryptocurrencies like Bitcoin have seen major mainstream interest over the past few years.

With so many people including various cryptocurrencies in their investment portfolios, some amassing significant wealth, you might be wondering if your crypto holdings carry any clout when it comes to impressing the loan manager at the bank.

What is cryptocurrency?

Cryptocurrency is one type of crypto-asset, a cousin of Non-fungible Tokens (NFTs), and distantly related to Security and Utility tokens. Essentially, it’s digital money which usually isn’t backed by physical assets (like gold, for instance). 

There are many reasons why cryptocurrency is so alluring, not least is the fact that its value can skyrocket, leading to quick (although risky) profit-making practices through trading. This is because its value is based on how much people are willing to actually pay for it - otherwise known as speculation. 

Cryptocurrency is also usually decentralised, and purportedly boasts increased digital security through its use of blockchain technology and encryption. 

While Bitcoin is touted as the first cryptocurrency to hit digital wallets in 2009, the market is hitting its ‘troubled teen’ years. Only instead of mood swings, you’ve got spectacular highs and crashing lows, leaving most people plainly confused by its behaviour.

So, will your crypto holdings factor into your lender’s loan decision?

In short, unfortunately not. This is partly because of the generally volatile nature of the cryptocurrency market.

A classic example being thrown about is that someone influential, like Elon Musk, could make a tweet which causes the price of Bitcoin to cliff-dive, devaluing your financial position drastically. That isn’t good news for you or the bank. 

If your current financial position is based on your crypto holdings, which can go up and down like a pogo stick, then your position is technically less concrete. That’s why banks won’t factor in your Bitcoin or other crypto when calculating their loan risk. 

What banks and lenders really want to see is consistency of earnings and a proven track-record of repayments, among other things that increase your borrowing power

Banks also won’t factor in your crypto-folio because these online coins aren’t considered a valid form of Australian currency, which is their bread and butter.

Can I use Bitcoin (or cryptocurrency) for a deposit or home loan repayment?

By cashing in on your cryptocurrency holdings you can use your Australian dollars for loan repayments or even a deposit. 

If you’re considering buying a property, make sure you understand the home loan process, including what information and evidence you’ll need to have ready. After that, compare home loan options to find the best deal for you.

Compare home loans - last updated 28 February 2024

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Jack Dona
Jack Dona
RG146
Money writer

Jack is RG146 Generic Knowledge certified, with a Bachelor of Communications in Creative Writing from UTS, and uses his creative flair to cut through the financial jargon and make home loans, insurance and banking interesting. His reader-first approach to creating content and his passion for financial literacy means he always looks for innovative ways to explain personal finance. Jack's research and explanations have been featured in government publications, and his work is regularly featured alongside major publications in Google's Top Stories for Insurance.