Cryptocurrencies, mostly Bitcoin, are starting to entrench themselves in all sorts of places, and one of those is the property market. There have been many cases of houses – from modest Grimsby abodes to Notting Hill mansions – that have been given a Bitcoin price tag by their sellers.
There has to be something to it, as many real estate agents are seeing some surprising advantages to simply slapping a ‘Bitcoin accepted here’ sticker on the front door. Of course, the housing market and the transfer of property is exactly the type of market that is ripe for a Bitcoin-styled disruptive take over, but as it stands, is it worthwhile to sell one’s house for Bitcoin?
One thing that is plain to see is those who decide to place their houses for sale in Bitcoin are suddenly inundated with media who want to push the story of adoption. The £17 mln mansion in Notting Hill has seen unprecedented interest since it went on sale in October. Lev Loginov, co-founder of property firm London Wall, which is selling the property, said:
"Last week we had 15 viewings. It's coming from Asia. I don't think we've had anybody older than 30."
Even a small and unassuming abode in Grimsby, on England's Northeast coast, garnered media attention across the globe. Cryptocurrencies are at the stage where they still elicit a “wow” factor when they crop up in new markets, and that makes them newsworthy. However, as more people do it, the media will likely move on.
A new market for new investors
As previously mentioned, those who are showing interest in buying investments as big as a £17 mln mansion are all young. Again, this makes sense as the adoption curve for the digital currency is much higher among young adults.
In the early days of Bitcoin, those who knew about and invested in Bitcoin were typically young and technically-savvy. Those are the early adopters who were buying Bitcoins by the tens, if not hundreds. Those same coins are now worth many, many times more, so much so that they can be spent on something like a house – Bitcoin used to be worth barely enough to buy pizza.
Loginov adds that it is early miners who own large numbers of Bitcoins:
"It’s lots of young people who got involved in cryptocurrencies at an early stage. Most of them made money from mining cryptocurrencies, and basically they're looking to acquire assets."
It looks like a Bitcoin property market could be exactly what young, up-and-coming crypto investors need. Such a market would be far removed from the usual red tape that comes with acquiring a house for fiat. However, some believe the selling of houses for Bitcoin is just a marketing gimmick.
Saurabh Saxena, founder of Houzen, thinks that people who invest in property are doing so for low-risk returns. This does not sit well with your typical Bitcoin investor’s risk profile. Saxena said:
"I sincerely believe that Bitcoin as a currency or exchange medium is not sustainable. It's purely a marketing gimmick. Developers typically raise money from pension funds or private equity. When a pension fund invests in real estate, they would typically expect a return of anywhere from 8 to 10 percent. Real estate is a low- to medium-risk asset class, and offers low to medium returns. Bitcoin is extremely volatile, and hence very, very high risk as a transaction medium.”