Investment banking giant Citigroup has released research on how property technology could affect the housing market, mentioning virtual estate in the metaverse and cryptocurrency-backed mortgages.

In a report released Wednesday titled, “Home of the Future: PropTech — Towards a Frictionless Housing Market?” Citi said crypto, blockchain and property in the metaverse had the “potential to transform the traditional real estate market.” While crypto-backed mortgages could streamline the process of purchasing a home, many individuals have seen investments in metaverse property grow in the last two years.

Citi reported that property loans linked to crypto assets could allow investors to “utilize their investment gains” without incurring capital gains taxes, but commented on the potential for risk in a volatile market. While many standard loans linked to fiat have regulatory procedures in place to assess the ability of a borrower to repay, crypto holders could be forced to pay significantly more should the price of tokens fall during a bear market.

“If the value of the cryptocurrency declines, the borrower may be subject to margin calls and ultimately the cryptocurrency may be liquidated if the collateral value falls below a certain threshold, such as 35% of the property value,” said the report. “Introducing cryptocurrency exposure into the credit profile arguably increases the overall risk of the loan.”

In addition to purchasing physical property, the Citi report commented on the potential benefits of owning and monetizing “digital real estate” in the metaverse. Specifically, researchers detailed how individual and corporate owners of the virtual property in The Sandbox (SAND) — called LAND — have treated the metaverse as an investment akin to property in the real world, with prices rising from roughly $100 per LAND in January 2021 to as high as $200,000 a year later:

“Given the nascent nature of the virtual real estate environment, many of the purchasers of LANDs lack concrete plans to cultivate the properties and are simply speculating on the platform’s future growth and thus LAND price appreciation.”

Related: Propy partners with Abra to provide crypto-backed real estate loans

The banking giant is not the first to consider the risks in crypto-backed mortgages. Prior to the recent bear market, Florida-based ratings and research firm Weiss Ratings warned investors that the falling price of Bitcoin (BTC) in addition to the performance of stocks, rising interest rates and the Federal Reserve’s policy changes could potentially make crypto mortgages a losing bet.