Cryptocurrency and Real Estate: The Future?
You’d have to be living under a rock if you haven’t heard the ruckus surrounding GameStop, bitcoin and dogecoin over the past two months. They are all interconnected by a time of market volatility that investors have never seen before. While GameStop and other “Meme stocks” have since corrected, Bitcoin and other crypto’s are still hitting record highs. So, what does that have to do with real estate?
First, let’s define cryptos such as Bitcoin and Dogecoin and how they work. Bitcoin is a digital currency, not physical like dollars or gold. What attracts consumers towards is its lower transaction fees than traditional online payments and that it’s operated by a decentralized authority. All balances are kept on a public ledger that can be verified by anybody and is not tied to a financial institution or government agency. As of February 23rd, Morningstar evaluates one bitcoin to be worth $46,283.30.
So how could Crypto currency (Bitcoin, Dogecoin, etc.) fit into real estate? There are more than a couple exploratory methods to incorporating crypto into transactions. Due to its digital footprint, it creates an expedient process to closing since you are no longer using a bank underwriting model. It also provides a more identifiable transaction statement than a bank, thus preventing fraud.
Many real estate companies have already begun to accept bitcoin as a form of payment. As bitcoin continues to age and possibly grow and integrate into culture, (Tesla and Mastercard are now accepting bitcoin), it will be interesting to see if more real estate companies start to openly accept bitcoin in sale/purchase & lease transactions.