By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC
Bitcoin reached a record high above $19,000 in December and then fell below $11,000 in the same month.
Called “Bitcoin fever,” the popularity of buying and selling the cryptocurrency isn’t just a risky investment opportunity – it’s becoming a way of paying for regular goods and services.
For example, more than 100,000 merchants worldwide accept bitcoin including, Microsoft, Expedia, Canada KFC, Whole Foods, and Subway restaurants.
It’s even becoming more common to buy a house with Bitcoin, but you need one thing: an agreement between the buyer and seller to exchange Bitcoin for the property.
The first single-family home sale involving Bitcoin took place in Texas and was announced in 2017.
“The challenge, which actually wasn’t all that challenging, was to figure out who would do an exchange that large,” J Kuper, a broker at Kuper Sotheby’s International, told CNBC’s Diana Olick.
The parties involved used BitPay to complete the transaction. BitPay turned the Bitcoin into dollars because the seller wanted U.S. dollars. BitPay has handled other real estate transactions, including a Lake Tahoe property that sold in 2014 for 2,739 bitcoins, or $1.6 million.
Since the idea of using cryptocurrency to purchase real estate is new, there is a “still a lot of nervousness for newcomers to the currency,” Olick reports, adding “much of the concern may be around the lack of regulation so far in cryptocurrency and the lack of understanding as to how gains in bitcoin are taxed.”
Some experts warn that buying real estate with bitcoin won’t be simple in every case.
As Open Listing notes, “Even if you are able to find a seller that’s willing to accept your offer in bitcoin, it can be tricky to find title insurance and escrow companies who feel comfortable handling virtual currency transactions. To take on your home purchase, they may require you to cash out your bitcoin so that your transaction can be treated more like a traditional house purchase.”
- 16 Jan, 2018
- Josh Smith