Yes well that is why they do not give 100% on the BTC.
So in the example, $200K in BTC collateral for a $100K house. If the price drops 50%, then they either be liquidated or they will have to put up more BTC as collateral. The house could have gone up or down but that isnt really part of the equation.
If they have no more BTC, the collateral is taken and the house is still theirs.
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