A survey from the New York Digital Funding Group (NWDFG) revealed that 22% of adults in America own bitcoin, which amounts to 46 million Americans. While the growing number of people who own bitcoin are into crypto trading on exchanges such as Binance and Redot.com, and the adoption of cryptocurrency as official exchange currencies around the world is a positive development for digital currencies, there are concerns from cryptocurrency traders and investors on the safety and volatility of cryptocurrencies.
71% of wealth buyers and managers in Europe and America with over $275billion in holdings, according to Nickel Digital Asset Regulation, are concerned about the safety of their assets and have considered investing their cryptocurrency assets into more stable investment portfolios.
This growing concern about the volatility of bitcoin and how investors are reinvesting in real estate blockchain industry is buttressed by Ben Shaoul, managing partner of Magnum real estate, who said that the company is now receiving more requests from real estate owners to sell their real estate to cryptocurrency holders. These requests are in line with the increasing mass adoption of cryptocurrencies.
The real estate industry, according to Eric Hadvet, chief operating officer of Jet Real Estate and special adviser at Magnum, gives cryptocurrency holders a way to grow their portfolio with the regular cash flow that comes with owning properties.
For most real estate companies, bitcoin payment is a fast and easy way to pay for properties. Magnum real estate, in 2019, sold a retail condominium building for $15.3million in BTC. The sale of that building was a success as it helped both Magnum and the buyer to escape the growing interest rate in the United States.
GROWING INTEREST RATES INFLUENCING BITCOIN PAYMENT IN REAL ESTATE
A survey carried out by the Monetary Occasion and the college of Chicago’s sales space college of Enterprise discovered that there will be an increase in the interest rate at least twice in the United States before 2024. Due to the increasing interest rates, investors are now moving their liquid investment to hard assets such as real estate.
This growing diversification of investment from highly volatile assets into more stable ones has led many investors to take loans on their cryptocurrencies to invest in real estate. Piper Moretti, CEO of The Crypto Realty Group, said, in a talk with Cointelegraph, that many of the investors taking a loan on their bitcoin investments believe that the price of bitcoin will increase in the future. By buying real estate with their bitcoin, investors can keep their cryptocurrency while also monetizing their investment through the loans they took.
Prediction from market analysts is that bitcoin will hit $100,000 before the end of 2024, but the slump in the price of bitcoin in September 2024 doesn’t make that prediction feasible. But if we have learned anything, is how fast the price of bitcoin can change.
BUT CASH IS STILL KING
Yes, you can buy real estate with real bitcoin. But among real estate agents and companies, cash is still king.
Moretti said that if, for example, a real estate vendor gets proposals to buy real estate properties with bitcoin, 99% of cash proposals are favoured more because sellers are still more comfortable selling their properties to people with cash. And because of the high liquidity of bitcoin, sellers favour buyers with cryptocurrency.
Bitpay, a bitcoin funds processor, has facilitated up to $100million worth of transactions in the buying and sales of properties in the last 5 years, says Sonny Singh, Chief business officer at Bitpay. Bitpay’s service allows consumers to easily convert their real bitcoin into dollars with a small transaction fee. So, if people want to buy real estate with bitcoin, Bitpay makes the process fast.
The lure to accept real bitcoin payments for properties is that the transaction fees when buyers use real bitcoin is small and the process is faster than using fiat. Bitpay makes the conversion process, helping the sellers avoid rigorous paperwork they’d have dealt with were they getting paid in actual dollars.
Also, because of bitcoin’s smart contract, the authenticity of transactions is guaranteed, and the payment process is faster and more secure. With Bitpay, for example, the company encourages its customers to work with companies that Bitpay already works with, therefore making the payment process seamless.
So long sellers can easily convert real bitcoin to fiat, the number of bitcoin payments in real estate will continue to increase. The real estate and cryptocurrency marriage will only grow tighter.
ARE BITCOIN FUNDS FOR PROPERTIES JUST HYPE
With the increasing level of people buying real estate with bitcoins, some business consultants and real estate investors are refusing to allow themselves to get sucked into the frenzy. They believe this trend is just hype, and will soon fade off.
But is this just hype? Has bitcoin payment in real estate, and for other goods and services, come to stay? Or will this hype die faster than it started?
The answer to the doubters comes from Natalia Karayaneva, CEO of Propy – a real estate property transaction process built on blockchain. Natalia says that bitcoin payment for properties isn’t a new thing. As far back as 2014, Bitpay helped in the sale of Lake Tahoe property that sold for $1.6million in BTC. People have been buying real estate with bitcoin before the hype started in 2024!
There was more.
In that same year, 2014, a tech entrepreneur listed his property in California for $3.6million, payable in BTC. Since then, pockets of transactions in the real estate blockchain industry involving bitcoin have happened. The recent media attention is nothing new, and if anything, is coming to terms with the growing influence cryptocurrency has in the financial world.
However, more can still be achieved with cryptocurrency payments in the real estate blockchain industry.
Natalia Karayaneva believes the next step in real estate payment will be for property sellers to accept bitcoin-to-bitcoin payments for their properties. This future that Natalia sees for real estate will eventually eliminate the need for middlemen, make the transaction process faster and safer.
Whether or not the real estate blockchain industry will eventually warm up to the idea of bitcoin-to-bitcoin transactions and real estate building their solutions on blockchain is left to be seen. However, we can rest assured that bitcoin payments for properties are not mere hype, they are here to stay. And as more countries accept bitcoin as a mode of payment, the property industry will eventually open its arms fully to transactions purely carried out on blockchain using bitcoin or other altcoins.