Good morning, investors. Since the Iran war began, the S&P 500 has erased $3.5 trillion in market value. At the same time, US gas prices have seen their sharpest jump in four years.

These two stats serve as bookends for the conflict’s near-term impact on both investors and everyday consumers.

For this edition, we’re turning our attention to an intriguing development for homebuyers.

Bitcoin enters housing

Fannie Mae is the backbone of American mortgage finance and it has been under government conservatorship since 2008.

It will now accept bitcoin as mortgage collateral for the first time.

Coinbase and Better Home & Finance partnered to launch a product that allows investors to pledge bitcoin or USDC for a down payment on a Fannie Mae home loan without liquidating their position.

Here’s how it works:

According to the announcement, mortgage terms still hold even if bitcoin’s price declines, but the collateral behind the down payment loses value.

With this new product, the forced-selling mechanism is gone.

But it still presents a risk as far as weaving crypto volatility into mortgage financing at scale.

Democratic lawmakers have already raised concerns about volatile digital assets entering the housing market.

Historically, crypto-backed lending has broken down as soon as falling prices force borrowers to sell.

This new structure is designed to break that cycle.

Tens of millions of Americans hold crypto.

Many accumulated bitcoin well below its $126,000 all-time high reached last October and have no interest in selling into a tax bill, even with the asset trading roughly 43% lower from its peak.

Fannie Mae, for its part, largely sets the pace of the housing market. That means the smaller players across the rest of the industry will likely follow this move with similar forays into crypto.

The spot bitcoin ETF approval in 2024 opened crypto to public markets.

This latest development opens it up to the housing market.

The stakes now feel much higher.

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🛢Iran rejected a US ceasefire proposal. Brent crude jumped above $106 a barrel, and Tehran countered with a five-point plan that included a demand for Strait of Hormuz control. (CNBC)

📉 The S&P 500 is on pace for its worth month in a year. Technical traders are looking to key Fibonacci levels in charts that could introduce compelling entry points after four weeks of declines. (Bloomberg)

📊 Micron stock sank for a sixth trading day in a row. Summit Insights downgraded the stock from buy to hold, citing $25 billion in planned capex and rising memory competition from Samsung. (Yahoo Finance)

I sat down with Sam Callahan, director of research at OranjeBTC, to discuss how geopolitics are moving bitcoin’s price, the deteriorating fiscal outlook, and how investors should think about hard assets in the context of the current macro situation.

Tune in on Spotify, Apple Podcasts, or YouTube.

🗓 March 27, 1980: Silver prices collapsed from $21 to $10 in a single session as the Hunt brothers failed to meet a $100 million margin call on their bid to corner the global silver market. The Fed stepped in with emergency loans.

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