Cryptocurrency is at the forefront of investing in today’s news, but ill-informed stakeholders have taken prices for a wild ride. Famously, bitcoin peaked at $19,500 in December 2017, only to fall to $7,000 a month later. Despite its instability, cryptocurrency has penetrated the retail market with over 100,000 merchants accepting bitcoin as payment, including Microsoft, Expedia, and Tesla.
Now you can buy real estate with cryptocurrency and the process is relatively easy; buyer and seller must simply agree on a price and find title and escrow companies willing to work with virtual currency. The first single-family home sale involving bitcoin was announced in 2017 and parties completed the transaction using BitPay, a payment service that allows you to convert bitcoin into U.S. dollars.
The exclusive Fisher Island, home to billionaires and celebrities alike, is attempting to bring bitcoin to the luxury home market. Unit 2333 in Bayside Village is a two-bedroom, two-and-a-half bathroom condo listed for $2.05 Million, or its bitcoin equivalent. The opulent, oceanfront condo offers spectacular natural lighting and extensive views of the Atlantic, Biscayne Bay, and Miami Beach skylines. If the buyer opts to pay in bitcoin, this would mark the first sale of a luxury home in bitcoin and would reinforce the security of the cryptocurrency’s future and set precedent for its impact on the global real estate market.
Real estate is a reliable outlet for established cryptocurrency investors who are looking to diversify into asset-backed investments. "The driving force behind the decision to list this property for bitcoin is to broaden the horizons for both buyers and sellers,” says Robert Volé, property owner and broker for The Island Realty. "We're looking at the evolution of both the marketplace and the buyer, while offering a new experience for sellers, many of whom are always looking at alternate means of liquidity.” Volé has over 25 years’ experience in developing, speculating and owning a number of properties on Fisher Island and South Florida.
Despite Volé’s optimism, the lack of regulation is a source of hesitancy to using cryptocurrency for real estate transactions, especially given Miami’s notoriety as being a haven for money launderers. There is also a lack of clarity in how capital gains from bitcoin will be taxed when the IRS has no procedure regulating the reporting of these transactions. Investor magnate Warren Buffett warned that the cryptocurrency craze is destined to end badly. It remains to be seen if a volatile currency like bitcoin that has fluctuated in value some 45 percent in three months is stable enough for large real estate transactions.
The unit is co-listed by Robert Volé and Elena Vertlib of The Island Realty.
Article by Katya Demina