Can You Purchase A House With Cryptocurrency?
Recently, meme coins such as Dogecoin and Shib have exploded in cryptocurrencies over these recent couple of years. Now, Non-Fungible Tokens (NFTs) have joined the market, so people can invest in digital artwork to hold and sell once the currency has grown even higher.
If you put money in Crypto back in the early days of 2009-2012, you’re most likely incredibly rich by now (providing you held on through the dips). Bitcoin, the “mother” of all cryptocurrencies, has ascended from about £1 per coin all the way to £30,000 at the time of writing. Just £30 back in 2010 would have made you a millionaire.
Now, £30,000 might seem a lot per coin, but Bitcoin has actually surpassed highs of up to £50,000! In fact, it will most likely hit this number again in the near future.
So, to answer the big question of this article – can you purchase houses with Cryptocurrencies like Bitcoin and Ethereum? Let’s go back to 2017 when a house in Essex was purchased for the first time in the UK using Bitcoin. The total cost of the house was 63 BTC, which at the time was around £350,000. This places the cost of that house in Bitcoin at around £2,000,000 today. Pretty expensive, hey?
As you can tell, the fundamental issue in purchasing houses with Crypto is its unpredictability, meaning the cost can change drastically in a very short window of time. One week it could be up 5%, and fall 10% the following week! This makes it truly challenging for estate agents to place a stable total cost on the house.
As well as this, estate agents are extremely careful about accepting crypto in the first place, as it has almost no protection and is extremely unreliable. For example, a purchaser can buy a property for 80 ETH (~£224,000), then the following day ETH drops by 10%, making the deal worth just £200,000. Luckily, there is of course a workaround for this, as the seller can instantly convert the crypto into GBP once the purchase has been completed.
Let’s assume you’re hoping to buy a house with BTC, yet the seller isn’t willing to accept crypto payments. At this point, you can exchange tokens in your portfolio for real money, but you should consider the expense of charges for such an enormous exchange across the blockchain network. The good news is that they are typically quite low!
What are the benefits?
Assuming you are into digital currencies and have a portfolio adequate enough to purchase a house, here are the key advantages.
- Purchasing a house with Crypto removes the “middleman”, which speeds up the process for both the purchaser and the seller. In this situation, the middleman would be the salesperson.
- Bitcoin, Ethereum, and so on don’t belong to a single bank, and that means it’s anonymous and done through blockchain – which is a decentralized network.
- The fees you’d ordinarily pay with a credit/debit card are basically non-existent when using Bitcoin. Binance in particular is known for its extremely low expenses and simple UI, alongside Crypto.com.
And the disadvantages?
Obviously, there are a few drawbacks and possible dangers when buying a house with Crypto, mainly because of its ever-changing worth and unpredictability.
- It’s very hit and miss. As we’ve mentioned previously, this is obviously a big issue with any Crypto. There are a few tools to assist you with predicting the future cost, however more often than not these sites are conflicting and don’t always play out as shown.
- Sellers will most likely only accept ETH or BTC, as they are the two fundamental, most widely known Cryptocurrencies. So if you have a portfolio with a large number of tokens in alt-coins, you might want to convert them! I doubt you’re going to find somebody accepting “meme” coins such as Shib, Safemoon, or Dogecoin.
- Finally, it may be hard to figure out insurance, stamp duty, and estate agent fees. This makes the whole process that bit longer. As well as this, Bitcoin isn’t protected by any UK regulatory protection scheme – this means no backup if your portfolio gets hacked or the price suddenly dips.
Will more sellers accept crypto payments in the future?
Currently, only a select handful of estate agents are accepting crypto prices on their houses. However, as crypto payments become more normalized, we’re sure that more will come on board!
I hope this article gave you a better insight into the crypto world, as well as purchasing property with it. If you’re interested in conveyancing services for real estate homes, please be sure to try out our online quote generator!
To know more visit conveyancing-assist today!
Have something in mind? Start publishing…
- Can You Purchase A House With Cryptocurrency? - February 2, 2022
- Benefits of Using Ductwork in Your Workplace - February 2, 2022