So-called cryptocurrency whales who have made millions, if not billions in profit from their early investments in Bitcoin and other digital currencies, are said to be flooding the luxury real estate market.
The Wall Street Journal says crypto millionaires have made some of the biggest purchases of homes over the last year. For instance, Brian Armstrong, the CEO of the most popular U.S. cryptocurrency exchange Coinbase, snapped up a $133 million home in Bel Air, Calif. last year, while Ivan Soto-Wright, co-founder and CEO of crypt payments infrastructure firm Moonpay, reportedly spent $38 million on a waterfront Miami estate.
Then there’s Olaf Carlson-Wee, CEO of Polychain Capital, a crypto investment fund, whose riches allowed him to acquire a Hollywood Hills mansion for $28.5 million.
Real estate developers have taken note of the interest among the crypto elite, and many have began accepting payments in cryptocurrencies such as Bitcoin and Ethereum for their high-end listings. At the same time, high-end real estate brokerages have been holding seminars to teach their agents how to sell to the crypto crowd.
Alex Sapir, a developer of luxury homes in Miami, told the Journal that some early crypto investors have made so much money that: “it’s gotten to the point now where it’s like ‘OK, so what do I do with all this?’”.
So far, only a few luxury real estate transactions have been done using cryptocurrency, and in most of those cases the sellers would instantly exchange the crypto for U.S. dollars. However, crypto is becoming more commonplace in the real estate industry. PMG recently because the first U.S. developer to start accepting pre-construction deposits on condos paid in crypto.
Avi Dabir, an executive at the FTX cryptocurrency exchange, told the Journal that crypto transactions will become more common in the real estate business as it is actually far more seamless. With crypto, transactions can be concluded efficiently, no longer at the mercy of delays as is the case with the traditional banking system.
“If I want to send a wire transfer today using my traditional bank account, it’s got to be banking hours, I need to make sure I hit that wire cutoff time and I can’t do it on the weekend,” he told the Journal. “That’s not a problem with cryptocurrency. It’s open 24/7.”