Wild volatility isn’t doing anything to dampen the real estate industry’s interest in cryptocurrencies, and it’s not just about luxury properties whose buyers made windfalls on crypto last year.
The underlying blockchain technology promises to revolutionize the way everyone buys homes—and now it’s going mainstream.
Already, real estate aggregators such as Zillow, Trulia and Realtor are seeing crypto competition pop up with impressive lists of homes for sale in bitcoin.
Bitcoin-Realestate.com offers everything from a $7,000 garage for payment in Ethereum to a $3.6-million Panama penthouse—and everything in between.
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Cryptohome.us is another emerging listing aggregator for sellers willing to accept cryptocurrencies.
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And crypto hit another milestone earlier this year with the first-ever sale of property in Ethereum, bypassing the clerk’s office in South Burlington, Vermont—one U.S. state that is not only embracing blockchain, but hoping to be one of the leading innovators:
“We are fortunate to have a cutting-edge statutory framework that enables the use of blockchain technology, and we will continue to work with the legislature to ensure Vermont remains at the forefront of these innovations,” noted Vermont Agency of Commerce and Community Development Secretary Michael Schirling.
Cryptocurrencies make sense for the real estate market …
Neeraj Agrawal, director of communications for the Coin Center, a virtual currency-focused think tank, explained his support for using Bitcoin in real estate transactions. He stated:
Within the context of real estate, it makes sense to use cryptocurrency in those types of transactions. Cryptocurrency is a way to send large amount of money pretty easily with relatively low fees and little interference from middlemen. Related: Bitcoin And Banking: The Next Mobile Payment Revolution
But the big story for real estate goes far beyond bitcoin. This isn’t about cryptocurrency, it’s about blockchain.
According to a Knight Frank report on global wealth, blockchain technology is indeed revolutionizing the real estate industry.
“Real estate trades at a relative discount to stocks and bonds because it is less liquid, but blockchain could theoretically close that gap ..”, says Knight Frank’s Tom Bill.
How? By reducing transaction times and frictions through a paperless legal process using blockchain’s digital ledger, and by increasing property market liquidity through ‘tokenization’.
“Enabling buyers to trade ‘units’ in real estate online, the impact of this on markets and pricing is potentially far greater than removing frictions from the sale process,” Bill notes.
Sweden is said to be far ahead of the rest of the world in exploring blockchain technology for property transactions. The country has already taken it on a test-run, while it’s also being explored in the United Arab Emirates, Georgia, Honduras and the UK, according to Knight Frank.
Abimanyu Dayal, chief executive of Estatechain, told Knight Frank that blockchain could “revolutionize the real estate market because it provides 100% liquidity 24/7… If you want to invest in London residential property today you are looking at £700,000-plus and are locked in for seven to nine years. Now you can enter and exit whenever you want and that is how people want to invest.”
So while the first round of real estate buys in bitcoin were about using up the fortune some people made in crypto over the past couple of years, the next round is about the mainstream buyer. Luxury paved the way, but the average home could soon be up for grabs in crypto.
After that, we’re looking at blockchain infiltration and a new lease on liquidity for real estate.
By David Craggen for Safehaven.com
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