Real World Property Adds Further Legitimacy to Crypto
If you can buy property with it, it has credible value – that’s the story coming out of Spain and 19 other countries with properties available for purchase in cryptocurrency. A new study found hundreds of properties around the world that could be bought using crypto, indicating that, in many ways, decentralized digital currency has truly arrived at the table of legitimate tender. Anyone who has purchased property knows that it can be quite the process, but cryptocurrency enthusiasts are hoping to streamline all that. For now, purchasing real estate with cryptocurrency isn’t too different from buying with fiat, though it certainly makes buying overseas easier by avoiding costly currency exchange fees. In the future, though, we may see crypto real estate transactions tap into the full power of the blockchain to execute smart contracts. Much of closing costs with real estate goes to the middlemen handling paperwork and digging into the property’s title history, but on the blockchain all that would be publicly available and easy to find. Could the days of combing through decades of physical documents in the basement of a county clerk’s office be over?
While the technology might already be here for such a simplified future, society hasn’t embraced it yet. Smart contract technology is still mostly used around NFTs, but has been shown to have a lot of promising real world applications. Real estate is no doubt a prime industry for blockchain disruptions, and we’re already seeing baby steps toward that. Spain leads the pack in the number of properties available for cryptocurrency with 289 listed. Thailand’s 227 and Portugal’s 130 earned them second and third place, respectively.
Crypto properties aren’t cheap. In the United Kingdom, properties averaged 62.23 bitcoins (or $1,410,200 USD), according to the study. In the U.S., it jumps up to 112.07 bitcoins, or $2,540,100. That’s still trailing Canada, where properties averaged a staggering 248.30 bitcoins ($5,715,100). Clearly, people who are dealing in crypto aren’t strangers to the money game. It might still be a while before your average suburban real estate broker gets into the cryptocurrency market, but once that happens you can imagine the effects that could have on cryptocurrency markets.
As more and more properties are listed and sold using crypto, more and more familiarity with the currency is built. That benefits all crypto users in the long run, as it means greater versatility when it comes to how and where you can spend your currency down the line. For investors, higher demand is a great thing. And because real estate prices, even down payments, are often a hefty sum, opening the real estate market up to cryptocurrency will likely pull quite a bit of demand. Average Bitcoin transactions will see a steep jump when people start buying their first homes with it.
In El Salvador, where progress is ongoing toward the creation of a “Bitcoin City”, the country is encouraging its citizens toward being able to use crypto for all of their transactions. As the first country to officially adopt bitcoin as legal tender, El Salvador has 39 properties available for sale – with an average price of 39.50 bitcoins, or $906,700. Being able to live in a city and pay for groceries, gas, utilities, and more using just cryptocurrency represents exactly the kind of freedom some ex-pats are looking for.
While not all countries are as forward-thinking as El Salvador with their all-in approach to bitcoin usage, crypto has been gaining steady ground in hotspots all over the world. In the US, small and medium businesses accepted cryptocurrency at a rate of 36% way back in 2020. As of late 2022, Deloitte estimates 2,352 U.S. businesses now accept cryptocurrency. Big food franchises are making the switch in test markets. Burger King in both Venezuela and Germany announced that it would accept bitcoin as legal tender. Pizza Hut in Venezuela also joined in, and for a time, so did KFC in Canada.
Of course, the number of items you can buy in person with crypto pale in comparison to what you can buy online, with everything from smartphones to luxury clothes and works of art available on assorted marketplaces.
Clearly, momentum is moving in crypto’s favor with major brands coming on board, studies finding increasingly widespread adoption, and now hundreds of properties available for sale in bitcoin around the globe. There are some major milestones to cross still – including the U.S.’s establishment of clear regulatory guidelines and the SEC’s acceptance of the first Bitcoin ETF – but when those are cleared, the sky’s the limit for the burgeoning crypto market.
