After experiencing explosive growth over the past few years, the use of cryptocurrencies to pay for real estate has all but come to a standstill following a precipitous decline in the value of digital assets.
Indeed, over the past five years, global cryptocurrency payments for residential and commercial real estate have grown from next to nothing to around $100 million, according to Kashif Ansari, the company’s co-founder and group CEO. of real estate technology Juwai IQI, noted in a South China Morning Post report.
According to Ansari, last year the use of bitcoin and crypto to pay for real estate all over the world was still in its infancy, and it is now on hold again due to the crisis.
“The use of digital coins to pay for real estate around the world has all but evaporated after strong growth in recent years, according to real estate analysts,” the SCMP report notes.
In particular, Ansari called cryptocurrencies “just a marketing and sales tool” for property developers. When a buyer pays for a property using a digital asset, the developer almost always instantly converts that amount into fiat currency such as US dollars.
A complete drop in the number of people paying with crypto
Elsewhere, US real estate broker Ryan Serhant, founder of the Serhant agency, who made about ten deals using crypto last year:
“We have seen a complete drop in the number of people using cryptocurrency to buy real estate. No one is selling their cryptocurrency right now and taking losses so they can buy real estate.
The cryptocurrency market, like the stock market, has seen a significant decline this year. For example, over the past six months, the value of Bitcoin, the most widely used digital currency, has declined by 60%, briefly hitting a low of $18,000 in June.
Bitcoin is the most popular crypto to buy property
Indeed, last year, the cryptocurrency that was used most often for the purchase of properties was Bitcoin. Autumn was the busiest time for Serhant, when Bitcoin prices ranged between $50,000 and $69,000.
Most of it was spent buying luxury apartments and homes in New York and Florida that were 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 an apartment 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, both of which have weak local currencies and a lack of regulatory safeguards to protect investments.