Bitcoin is gaining acceptance as a valid currency for transacting real estate deals, with the frequency of such transactions becoming far more commonplace.
"Our buyer has evolved; they've moved from mom and pops to young people who want to pay with various forms of payment," Ben Shaoul, president of Magnum Real Estate Group, told CNBC. "Cryptocurrency is something that has been asked of us—'Can you take cryptocurrency? Can we pay that way?'—and, of course, when somebody wants to pay you with a different form of payment, you're going to try to work with them and give them what they want, especially in a very busy real estate market."
Shaoul is currently redeveloping a condominium in the Lower East area of Manhattan, with units priced at $700,000 to $1.5 million. He said most Bitcoin users tend to be younger professionals, though requests to pay in BTC have come from buyers scattered all over the world.
The trend towards using Bitcoin in real estate comes following a meteoric rise for the number one cryptocurrency in 2018. Bitcoin is currently trading at around $5,600 at the time of press, up from around $800 per coin at the start of the year.
Bitcoin in real estate isn’t entirely new. One of the first ever transactions involving the cryptocurrency saw $1.6 million worth of BTC handed over for a Lake Tahoe property in 2014. More recently, Texas saw its first single-family home sale paid in full in Bitcoin.
"Austin is a really technologically advanced city, I'd say, so I was surprised we hadn't heard anybody wanting to do this before," J Kuper at Sotheby's International Realty, which brokered the deal, told CNBC. "But, candidly, we didn't know how to do it. It was a quick challenge and scramble to figure out all the moving parts, but we were instantly excited about the opportunity to figure that out."
With most transactions, the seller will agree to a fixed price in dollars, and the buyer may then convert the bitcoins into dollars. But buyers are at the mercy of what the bitcoins are worth that day in exchange rates. Rates can be volatile, sometimes fluctuating by several hundred dollars in the space of just a few hours.