Is the Real Estate Industry Ready for the Bitcoin Takeover?

Some people are into it, others think it’s just a fad, however it’s certainly that should not be ignored. Bitcoin had a wild ride last year and its price reached an all-time high, catching the attention of the majority of those who follow the news. Despite signs of a bubble and recent dips, Bitcoin continues to entice investors and now, there are a lot of debates among regulating authorities. A lot of big companies across various industries accept Bitcoin as a legitimate mode of payment; the real estate is expected to follow suit. Sellers are making efforts to expand their buyers’ pool by starting to accept Bitcoin and other cryptocurrencies as payment methods and to boost their exposure. There are now property listings in Miami, New York, Melbourne, and other big cities that accept bitcoins as payment. Presently, there are now websites that list properties for sale with bitcoin as their primary mode of payment. Prior to being embraced as a trusted mode of payment, cryptocurrencies’ concerns of regulation still need to be resolved. There’s also not enough information about how they work and a growing stigma due to big price fluctuations and news of price dives. Risk Accepting cryptocurrencies has very minimal risks if the seller is to liquidate the payment immediately to be safe from massive fluctuations and market crash. Just in January, there were a few major dips where bitcoin has plummeted to less than half. Lack of Regulation The challenge real estate developers face if they are to accept cryptocurrencies as payment is the lack of regulation and integration with escrow accounts. Maintaining accounts that are prone to being shutdown or banned is a challenge as well. For buyers looking for mortgage from traditional lenders,, cryptocurrencies are not accepted yet as a form of down payment. Advantages Crypto has a lot of admirers and haters. While some investment tycoons state that crypto will soon come to an unfortunate ending, others are pushing agreements with big companies to begin accepting them as legal payment. Truth of the matter is, blockchain, the platform behind cryptocurrencies can solve major issues and make real estate transactions a seamless experience. Transferring huge amounts of money is cheaper and faster with crypto and it could open new opportunities. Tax Every time we purchase a product or service, we pay taxes. While making payments through a tender that is not regulated, there’s no possible way to charge tax on it. This is a major problem for all industries, real estate is not exemption. Below is the SWOT analysis to see if crypto would be a perfect fit for real estate transactions: Strengths • Hassle free global transactionsrn• Lower transfer feesrn• Security: As it's powered by blockchainrn• Fast settlement Weaknesses • Hardware failure: Wallets may crash; exchanges may get hackedrn• Volatilityrn• Reputationrn• Lack of tax regulation Opportunities • Partial ownership of residential propertiesrn• Establishment of a more transparent ecosystem through smart contracts Threats • Rapid technological advancementrn• Alteration of government rulesrn• Huge price fluctuations As we move more and more into a cashless society, crypto is expected to be the future of currency. Governments across the globe are starting to take crypto seriously and are still pretty divided whether they are in favor or against it. There are a lot of discussions across all industries whether crypto will transform the financial ecosystem and how it affects our daily lives. However, there are still a lot of work to be done and issues to be solved. Interested to know more about how to integrate bitcoin as a form of payment in your website? Contact Coefficients now!