On the one hand, it warms my heart and soothes my soul to see cryptocurrencies penetrating the real estate market. I’m a long-time advocate for the New Economy and its forerunner – the cryptocurrency-based new payment systems that are out to give PayPal a run for its money. On the other hand, there’s much to discuss as crypto entrenches itself in the real estate market, which is traditionally a fiat space.
When I say “cryptocurrencies,” naturally, in the case of selling various modest and not-so-abodes for digital money, I mean pricing them in Bitcoin. Right now, Bitcoin is the only denominator in the alternative economy, I’m sorry to say, oftentimes realtors simply take advantage of the hype, barely understanding the meaning and benefits of pricing goods and services in cryptocurrency. But it’s fashionable to have a Bitcoin price tag next to the dollar value of the property, so they do it.
More and more, I see signs like “Bitcoin is accepted here” on realtors’ social profiles, on their websites, on the otherwise very much analog doors to their downtown offices. It’s cute, but don’t try to approach these people for explanations or advice. In most of the cases I’ve encountered, the “Bitcoin” logo is a mere marketing tool.
Listing a high-end property for sale in Bitcoin is a surefire path to relentless media attention and countless viewings, as I’ve seen with the £17 million Notting Hill mansion. For an ultra-high-end London property, a Bitcoin price tag is as important an attribute as a £ 1,500 suit for an agent conducting the viewing. And the results are as expected: 15 viewings a week, dominated by the 30-somethings of Asian descent.
Again, I have mixed feelings towards all this. As a long-time advocate of blockchain technology and cryptocurrencies, I know I should be glad that the cryptocurrency-priced listings still command such broad media attention, and each occurrence is publicized as if something extraordinary is happening. But blog posts, interviews, and videos signaling the newsworthiness of each such transaction on the real estate market are confirming that it is out of the ordinary. I dream that, a few years from now, it will simply be assumed that a property can be paid for in cryptocurrency. Unfortunately, right now, purchasing in Bitcoin solves neither of the problems cryptocurrency was designed to address—the poor remain poor, the dollar is still a world reserve currency, and the New Economy is still kind of a fluid concept. The Bitcoin-rich demographic is mostly early adopters – the young techies who used to mine the coin for fun and then spend it on shirts or pizza. Now they have enough to buy a house in London proper.
Again, two ways to look at it. The way of an optimist is that the young and the hungry have gotten themselves a new way to buy real estate, avoiding red tape, speeding up the process, preserving their privacy while keeping an indelible record of the transaction on the Bitcoin blockchain. But a pessimist knows that the real estate developers mostly raise money from private equity or pension funds. These are conservative investors looking to park their clients’ cash in low-risk assets and deliver the 7-9% returns they promise in their crummy brochures. Somehow, a pessimist continues on with his line of questioning; it doesn’t fit the typical profile of a cryptocurrency investor, no? Well, you tell me.
