One of the things that attracted investors on Bitcoin over the past years is the lack of regulations surrounding the digital currency. However, after its value skyrocketed and cryptocurrencies received mainstream attention, governments have also decided to take the necessary steps to regulate the highly speculative asset.
In fact, China has not only banned cryptocurrency exchanges, the country has also ordered to monitor energy consumption in order to crackdown digital currency mining operations. On the other hand, South Korea has also taken necessary regulatory steps and even considered total Bitcoin trading ban. One thing that makes Bitcoin alarming to different countries is the highly speculative nature of the currency and the possibility of assets leaving their economy’s circulation.
US Real Estate and Bitcoin Transactions
Bitcoin fever is now currently making waves on US real estate. Particularly, Florida’s real estate has been luring individuals that are looking to dodge regulations and other sanctions.
According to a real estate company, Redfin, there were already 75 properties located in South Florida and California that can be bought by the digital currency. There are sellers that now post “Bitcoin accepted” as part of the ad’s description.
There are sellers that are even taking only Bitcoin for their properties. In fact, there is one seller that wants to sell his property for 33 bitcoins. It’s a downtown condo property in Florida that costs half million dollars.
Is this a good idea to accept the cryptocurrency for your real estate property? Bitcoin has experienced a roller coaster ride since shooting up to almost $20,000 in mid-December. It has dropped sharply only to recover during the first days of 2018 to around the $14,000 range.
Because of Bitcoin’s volatility, many real estate agents are wary about its application. Though it sounds an out-of-the-box idea, it becomes a gamble, especially for sellers. According to Jay Parker, CEO of Douglas Elliman brokerage agency, he mentioned that “I’d be blown away if a year from now we see hundreds of real estate transactions in bitcoins”.
Attracts Foreign Investment
But one of the primary markets that this trend could potentially attract is foreign investors. This can be useful for foreigners looking to circumvent international regulations.
According to Charles Evans, economist and bitcoin expert from Barry University, he mentioned that “this seems to be driven by international investors who are circumventing inefficient banking and currency controls at home, and by US cryptocurrency enthusiasts”.
He also mentioned that governments may restrict the amount of money that people are able to transfer abroad via their banking system. With the use of Bitcoin, it is possible to bypass these regulatory restrictions set by local laws.
According to statistics, half of the foreign buyers of real estate properties in South Florida are from Latin America. Based on the numbers collected by National Association of Realtors, Venezuela, Brazil, and Argentina are countries that have led the purchases in this part of the US.
Money Laundering Possibility
Bitcoin is feared as an option that money launderers can use in order to dodge US sanctions. In fact, it is an open secret that South Florida is a haven for money launderers.
If you will ask Parker, he believes that people are also using Bitcoin in order to market the property since this could get the property better exposure.