Bitcoin Payments for Real Estate Gain Traction | Empirex Capital

Bitcoin Payments for Real Estate Gain Traction

Could crypto payments for real estate become another notable way for people to invest their BTC? In this Empirex Capital article we explain how the real estate market is in relation to Bitcoin.

Crypto investors are betting big on real estate this year as the cryptocurrency market continues to grow. New York Digital Investment Group (NYDIG) recently conducted a survey that found that 46 million Americans own Bitcoin, equating to 22% of all adults. While optimistic, some cryptocurrency investors have expressed concerns regarding the security, custody and volatility of digital assets.

For example, Nickel Digital Asset Management, a regulated European investment manager dedicated to the crypto market, surveyed institutional investors and wealth managers from the United States and Europe who collectively have $275 billion in assets under management. Findings show that 76% of these individuals are concerned about the security of their digital assets. The same percentage said this about the size of the market and liquidity, followed by 71% who see the regulatory environment for the crypto market as a major issue.

This in mind, many crypto holders have started investing Bitcoin (BTC) and other cryptocurrencies into less risky assets such as real estate. Ben Shaoul, managing partner of Magnum Real Estate Group, told Cointelegraph that the company has recently been receiving more requests to sell real estate to cryptocurrency holders. According to Shaoul, Magnum began conducting crypto for real estate transactions about three years ago:

“We hadn’t tackled this before since most real estate developers didn’t understand crypto paymements. But we understood what it meant and how we could structure a sale for cryptocurrency. With the help of our legal team, we figured out how to conduct crypto transactions with the consent of regulators. We first sold a few residential units and then we sold a retail condominium in New York about three years ago for cryptocurrency.”

Eric Hedvat, chief operating officer of Jet Real Estate and a special consultant for Magnum, further told Cointelegraph that given the fast-paced growth of today’s crypto market, BTC payments for real estate is more important than ever before since it offers crypto investors an opportunity to grow with cash flow: “The cryptocurrency market has created a vast network of new wealth that wants to find traditional assets to invest in like real estate. There also aren’t many commercial properties for sale to buy with Bitcoin.”

Specifically speaking, Shaoul noted that the income generated from the retail condominium building that Magnum sold for $15.3 million in BTC during 2019 is all credit. “M&T bank has been a tenant in this building since it was built. They are a multi-billion-dollar bank.” This is an important detail, as Shaoul further commented that individuals who have created new wealth with cryptocurrency don’t have a way to monetize it or create a steady income stream:

“This property has over a million dollars a year of free cash flow. This is a very attractive offering for someone sitting on wealth they’ve created in cryptocurrency. This gives them an opportunity to monetize and effectively collect a bond moving forward.”

While it’s too soon to tell whether blockchain technology will be the missing link for real estate transactions, it’s clear that more crypto holders are using Bitcoin to purchase properties today. “People are looking to move unstable assets to a stable asset. And what’s more stable than real estate?” Singh remarked.

Created on 27th Jul 2021

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