The real estate industry, like most every other industry, is in the midst of figuring out its connections, if any, to crypto-currency. Since crypto came on the scene a decade ago with the launch of Bitcoin, more and more property buyers and sellers are using crypto as a form of payment. And now, during this past decade, there are some 3,000 different types of digital coins being traded, some of which are specific to real estate.
One of the downsides to crypto-currencies is the extreme volatility of its market. Its market worth in mid-November 2019 was estimated at $222B…a far cry from its market cap of some $830B at the beginning of last year.
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Another crypto concern is fraud potential. Some sellers in large markets are now walking back their commitments to decentralized coin usage because of issues with fraud. Additionally, since all parties involved in a crypto real estate transaction have to be on board, some lenders and attorneys are more than a little reluctant to sign off on crypto deals.
Here is a brief summary of current crypto real estate values and deals:
- Bitcoin-realestate.com, launched in 2013, had 265 listings in North America as of mid-November 2019.
- The value of Bitcoin as of November 25, 2019, was $7,142.73. That $7,142.73 equates to $1.00 equal to 0.00014 Bitcoin. In late 2017, the value of Bitcoin hit $20,000/coin. The value of Bitcoin hit $7,307.39 on October 23, 2019 and then jumped +40% in one day to $10,300, according to
- The most expensive Bitcoin-to-Bitcoin sale happened in February 2018 for the equivalent of $6M.
- Coinbase, a crypto-currency exchange, indicated there were 2.7M Bitcoin users in the US as of 2019.
- In late July 2019, the IRS sent letters to some 10,000 people warning them they might not be in compliance with tax rules for virtual currencies. Obviously, determining proper regulations for paying taxes on crypto-currencies can be a big headache.
- Magnum Real Estate’s Shaoul sold an Upper East Side condo to the Taiwanese firm, Affluent Silver International LLC, for $15.3M in Bitcoin in 2019.
- Crypto thefts and scams obtained $4.26B during the first half of 2019, according to
- One alleged Ponzi scheme may have defrauded millions of users out of $2.9B in assets.
- CipherTrace’s report indicated that the biggest offenders of crypto thefts and scams were “insiders.”
Thanks to The Real Deal’s Eddie Small for source data.will