Bitcoin is facing mass adoption all around the world. So much so, that it is being used to buy assets in one of the oldest asset classes of all time.
When it comes to real estate, Bitcoin payments are being widely accepted. We have previously covered stories of Bitcoin payments accepted for apartments in Dubai to mansions in London.
The real estate brokers in Miami did not want to be left out of the fray. Just recently, it was reported that a penthouse in Miami worth $3.5m went for sale in Miami Beach. The owner also claimed that they would be accepting payments in Bitcoin and Ethereum.
What first started as a trickles has now become a strong flow. In September this year, Kuper Sotheby’s International in Texas claimed that they had completed the first sale of a house with Bitcoin.
What was most surprising was how smoothly the transaction was completed. They claimed that the transaction went off without a hitch. Moreover, it was completed in a mere matter of only 10 minutes.
This will no doubt take alot of the stress out of the transaction process and is the impetus for all of the real estate deals that have now being listed for cryptocurrencies.
Perhaps another reason that the seller has decided to list the property in Bitcoin is the decentralised and homogenous nature of the currency. There is no friction between borders and it has about the same value in a number of different countries.
Moreover, the proportion of real estate buyers in Miami that are foreign is much higher than in other US cities. It is much more convenient for an overseas buyer with Bitcoin to buy it directly than send a large amount of money out.
Even if the buyer eventually foregoes the opportunity to buy the property with Bitcoin, one cannot discount the additional marketing benefits of accepting Bitcoin payments in cryptocurrency.
Potential Speed bumps
Given that Bitcoin and crypocurrencies are such a new form of payment, this means that they lack many of the protections in real estate purchases that have existed for many years.
For example, when making large payments for illiquid assets such as real estate the use of traditional escrow services are preferred. There are also a number of other protocols that banks have established for the administrative process of a real estate deal.
Of course, there are also the concerns that real estate sellers may have over the price volatility. Bitcoin can easily move 10% a day up or down. This means that during the sale process, the owner / buyer face substantial risk for the eventual sale price. Other cryptocurrencies such as Ethereum have also been just as volatile.
More on the Horizon?
Despite the potential risks with a Bitcoin sale, there is precedent through previous sales like that in Texas. Moreover, Miami is one of the most well known real estate markets in the US.
A listing for a penthouse in Bitcoin could no doubt provide impetus for sellers in other cities and countries to follow suite. Given the rate with which people are buying and investing in cryptocurrencies, ignoring such a potential market wold be unwise.