With Bitcoin breaching the $40,000 mark recently, it has got a lot of institutional investors optimistic about the world’s largest cryptocurrency. Let us see if Bitcoin should be combined with Real Estate, which is the largest asset class in the globe.
The Acceptance of Bitcoin in Real Estate Deals
- Many luxury properties tokenized on the blockchain network accept Bitcoins for transactions.
- The volatility of Bitcoin is a concern as there are frequent changes in its value depending on the market conditions. The market swings affect property buyers more than sellers.
- If progressive regulations are present, Bitcoin will become accountable and legitimate.
- Wealthy investors can diversify their Bitcoin holdings and invest in income-generating properties.
- Various intermediaries like brokers, title companies, escrow agents, and banks need to be confident of utilizing Bitcoin for settling transactions.
- Real estate agencies in New York, Texas, and Florida accept Bitcoins as payment for buying properties.
- Many properties in Indonesia are purchased and sold via Bitcoin.
- It is tough to determine a buyer’s credibility as their ownership of Bitcoins is part of their credit score. This increases the property seller’s risks.
- Security tokens are gaining a lot of foothold in the capital intensive Real estate industry and it will decrease overhead costs and boost the liquidity.
The Process to Follow While Purchasing a Property Using Bitcoin
- Both the parties, the buyer and seller of the property must accept the Bitcoin usage.
- Some deals may involve the conversion of fiat currencies into Bitcoin.
- The transaction is processed quickly unless the network gets congested.
- The buyers and sellers must remember that transactions made via Bitcoin are irreversible.
- It eliminates third parties by using modern cryptographic techniques.
- It can also prevent the chances of fraud as each user will have a private digital ID secured by the distributed ledger.
- Apart from payments, Bitcoin can assist in the transfer of property deeds, mortgage settlement, and escrow.
- A verifiable chain of ownership is ensured by the virtual currency and the participants have access to information on a real-time basis. This ensures more transparency.
- Bitcoin comes with advantages like a peer to peer system, protection against inflation, is easy to trade, and low transaction costs.
- KYC/AML verification should be performed on the property buyer and tax exposure needs to be minimized for foreign clients.
The Latest Developments Where Bitcoin Has Been Used for Buying Real Estate
- According to BitPay, the Bitcoin expenditure on Real estate will double soon. It will be used both for Real estate development and sales. BitPay converts Bitcoin into US Dollars and transfers the money to an escrow agent who holds it until the buyer makes the payment to the seller. The company charges a 1% processing fee.
- In countries like China, many Crypto investors are using Bitcoin to purchase properties abroad due to the uncertain regulations. Many securities brokers from Hong Kong are taking care of the tokenization of property rights.
- The top markets for Real estate are the US and the UK, with cities like California, San Francisco, Los Angeles, New York, Texas, and London witnessing high demand.
- Title and insurance companies need to be made comfortable in handling virtual currency transactions.
What Are Some of the Platforms That Accept Bitcoin for Purchasing Real Estate?
- Propy, a platform for automating Real estate transactions. Smart contracts control all the business operations. The property closing process is taken care of by blockchain technology.
- BrickEX, a decentralized real estate exchange enables tokenization of property. It maintains a detailed real estate repository that offers more liquidity and transparency.
- Harbor, a digital security token platform has already tokenized property worth $100 million.
- Gold Wynn, a platform for investing in various properties accepts all the leading cryptocurrencies from real estate buyers.
- Meridio, a platform that converts Real estate into digital shares on blockchain accepts Bitcoin as it helps in streamlining transaction processing, unlocking more amount of capital, and ensures real-time execution of trades.
- ATLANT, a global real estate blockchain platform tokenizes properties and provides investors with the opportunities of fractional ownership and P2P rent collection.
- EWO Place, a startup offers rewards for users from the properties that they do not own. The users get a share of the profits, fair pricing based on the prevailing market conditions, and also access to the EWO token that can be exchanged for crypto assets. They are targeting people who prefer affordable accommodation as the market lacks supply currently.
A blockchain-based system will share information about property sales to potential buyers quickly. If adequate security measures are present, Bitcoin will play an integral role in the Real estate industry. It does lead to cost reduction and enhancement in operational efficiency. Bitcoin can revolutionize the property industry in the years to come.