Will it be possible to buy a home with Bitcoins?
Investors around the country are captivated with the debate surrounding Bitcoin and other cryptocurrency. Bitcoin, the first digital currency that does not require a bank or middleman, is traded online through a digital ledger. In the past month, the valuation has soared from $5,870.37 per coin on November 12, to $16,650.01 per coin on December 12. While some investors are warning of a “crypto bubble,” others are researching ways to integrate the cryptocurrency into the greater economy.
Real estate agents around the country are having conversations with buyers and sellers regarding the use of cryptocurrency as part of a home purchase or sale. Redfin reports real estate agents in both San Francisco and San Diego worked with buyers who used the proceeds from the sale of Bitcoins toward buying a home. Additionally, 75 listings nationwide include sellers who are willing to accept Bitcoin as a form of payment. Mike Sorohan from the Mortgage Bankers Association wrote, “At its current value (just under $18,000 as of Dec. 15), someone could purchase the median-priced U.S. home ($292,000) for slightly more than 17 Bitcoins.”
While the sale of a Bitcoin can produce actual cash to be used toward a home purchase, accepting Bitcoin as a form of payment is murkier territory. Redfin Managing Editor, Natalie Schwab explained, “For buyers who have made a lot of money on the recent surge in cryptocurrency value, buying a home is a reasonable way to use the proceeds. For sellers accepting Bitcoin, however, it’s riskier because accepting cryptocurrency as payment is a bet that it’s going to continue to increase.”
Bitcoin supporters, like Peter Smith, the CEO of Blockchain, a cryptocurrency wallet platform, believe that central banks are likely to hold digital currencies in their balance sheet as early as next year. CNBC reports that the United Arab Emirates and Saudi Arabia intend to issue a cryptocurrency for cross-border trade and China’s central bank is considering issuing a cryptocurrency as well. However, European Central Bank President Mario Draghi explained, “right now we think that especially as far as Bitcoins and cryptocurrencies are concerned, we don’t think the technology is mature for our consideration.”
As the value of Bitcoin continues to appreciate, more discussion surrounding its use in financial transactions is expected.
Sources: CNBC, Mortgage Bankers Association, Redfin