After seeing explosive growth in recent years, the use of cryptocurrencies to pay for real estate has virtually ground to a halt as a result of a sharp drop in the value of digital assets.
In fact, over the past five years, worldwide cryptocurrency payments for residential and commercial real estate have risen from next to nothing to around $100 million, according to Kashif Ansari, co-founder and group CEO of the tech firm. real estate agency Juwai IQI, noted in a China South Morning Post report.
According to Ansari, last year the use of Bitcoin and cryptocurrencies to pay for real estate anywhere in the world was still in its relative infancy, and is now on hold again as a result of the crisis.
“The use of digital currencies to pay for real estate globally has all but evaporated after strong growth in recent years, real estate analysts say,” the SCMP report noted.
In particular, Ansari characterized cryptocurrencies as “just a marketing and sales tool” for real estate developers. When a buyer pays for a property using a digital asset, the developer will almost always instantly convert that amount to a fiat currency like the US dollar.
A complete drop in the number of people paying with cryptocurrencies
On the other hand, American real estate broker Ryan Serhant, founder of the Serhant agency, which carried out about a dozen transactions using crypto last year:
“We have seen a complete drop in the number of people using crypto to buy real estate. No one is selling their cryptocurrency right now and taking losses so they can buy real estate.”
The cryptocurrency market, just like the stock market, has seen a significant decline this year. For example, in the last six months, the value of Bitcoin, the most widely used digital currency, has decreased by 60%, briefly reaching a low of $18,000 in June.
Bitcoin is the most popular among cryptocurrencies to buy properties
In fact, last year, the most frequently used cryptocurrency for property purchases was Bitcoin. Fall was the busiest time for Serhant, when Bitcoin prices ranged from $50,000 to $69,000.
Most of it was spent on the purchase of luxury apartments and houses in New York and Florida that are between 1,000 and 2,000 square feet and cost around $3 million.
145 Central Park North, a property in New York City, was one of the developments that enabled digital currency payments. According to Serhant, one of the inventors of the Ethereum digital token bought a flat in the high-end building for a price of three million US dollars.
Finally, the level of interest has been highest in countries and regions such as South America and South Africa, which have weak local currencies and lack regulatory guarantees to protect investments.