- Cryptocurrency wealth generated over the pandemic has encouraged developers to cater to this growing source of buyers of luxury property
- Legions of cryptocurrency “hodlers” have many unwilling to sell their digital assets at any price, preferring instead to take loans on their holdings
As cryptocurrency wealth has soared over the past decade, some of the industry’s earliest pioneers are making waves in the luxury real estate market and developers are jumping through hoops to accept cryptocurrency for payment.
Given the surge in cryptocurrency fortunes over the past year, realtors are pulling out all the stops, enticing buyers with everything from NFT parties to organizing cryptocurrency seminars for real estate agents so that they can learn the lingo of the industry.
Some U.S. realtors are openly advertising that they are willing to accept crypto in exchange for homes.
Cryptocurrencies may be notoriously volatile, but many who got into the industry early are true believers in the future of digital assets, unwilling to sell at any price.
A recent study by the U.S. National Bureau of Economic Research found that the top 10,000 individual Bitcoin digital wallet addresses held an aggregate US$232 billion and movement of the benchmark cryptocurrency at these levels is limited, if at all.
Many cryptocurrency holders (or “hodlers” to use the proper nomenclature) aren’t looking necessarily to sell their stash but may be wondering what they can do with it.
Enter companies like Abra, which manages over US$1 billion in cryptocurrencies and offers loans for down payments that are backed by the borrower’s cryptocurrency holdings.
Many are long Bitcoin or Ether and generally are loathe to sell their stakes because they recognize that in the long run, most who have sold have regretted doing so.
Even though cryptocurrency prices have been volatile of late, even on a 3% mortgage, many cryptocurrency investors have sufficient buffers and an outlook that is far better than 3%, which would more than cover their payments, even if rates should rise.
Some of the longest-term cryptocurrency investors see the current dip in prices as an opportunity to buy, gauging that short-term investors are in a sentiment of “extreme fear.”
Recently, PMG became the first U.S. real estate developer to accept preconstruction condo deposits in cryptocurrency and last year the firm partnered with exchange FTX US to accept crypto as down payment for units at two of its buildings, E11EVEN Hotel and Residences, and the ultra-luxurious Waldorf Astoria Residences in Miami.
Helping fuel the real estate market, crypto transactions take a fraction of the time to secure deals and operate 24/7, unlike typical transactions.
If buyers want to send cryptocurrency to secure a property, they can do it any time, and not just within banking hours.
