Will Bitcoin become the next payment option for property?
Bitcoin’s taken the market and investors on a never-ending rollercoaster ride. Just last month the well-known cryptocurrency hit a record price of nearly $91,000, only to drop by almost 20% in less than a month. The highs and lows of Bitcoin are one of the reasons naysayers are nervous about making it legit. So, should buyers open up a digital wallet to purchase a property?
What’s the deal with bitcoin?
Way back in 2009, just one year after the global financial crisis, the world’s first cryptocurrency was created. It was called Bitcoin by its anonymous creator Satoshi Nakamoto (which is a pseudonym). Just like Batman, his identity remains a secret to this day.
Cryptocurrency was created as a form of virtual cash. The whole point was to cut out the influence of the middle man aka big banks and government.
Most people who buy Bitcoin are looking to invest long-term and store their digital pennies in a virtual vault. This way they can benefit from future growth and avoid the almighty lows of the market.
There’s a good reason for it too. The first-ever Bitcoin purchase was made in 2010. Laszlo Hanyecz spent 10,000 Bitcoins (worth around $40 at the time) on two pizzas from Florida pizza joint Papa John’s. Had Hanyecz held onto those digital dimes they’d be worth over $350 million today that’s more than $175 million per slice (ouch).
From pizza to property, how legit is crypto?
It seems anybody who’s anybody is publicly endorsing bitcoin from actress Lindsay Lohan to Tesla CEO Elon Musk. In Australia, companies like Microsoft, Overstock, and eGifter have all started accepting Bitcoin. The question is, should real estate agents?
Bitcoin has been used to purchase properties outright in Portugal, Spain, USA, Panama, Germany, Thailand, and Argentina. In Australia, there have been a few property listings where vendors have been happy to accept digital currency as payment. Olympic swimmer Cam McEvoy was ready to trade his Gold Coast villa for cryptocurrencies including Bitcoin.
While the Real Estate Institute of Queensland said cryptocurrencies were approved for use in Australia, their message was also clear – proceed with caution.
- Agents could open their property to a wider buying market by accepting alternative forms of payment like Bitcoin. Ultimately it comes down to the buyer and vendor agreeing to exchange Bitcoin for the property.
- The high volatility of Bitcoin carries a lot of risks. Dramatic changes in value could affect negotiations all the way up to settlement day.
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