While Beijing has long been concerned with the efforts of its super rich to move money abroad, the rise of China’s rapidly expanding economy has put overseas investment within the grasp of a vast new body of people – fresh bitcoin millionaires.
Bitcoin money floods property after the crackdown of China’s tax authority against its own residents hiding assets overseas, including bank savings, securities, insurance products and trust funds, but fortunately for crypto miners, not property.
From a halt to virtual currency trading on domestic exchanges to banning initial coin offerings (ICO’s), this January, regulators are moving in for concentrated targeting of blockchain related companies to further discourage bitcoin mining.
Against the vision of Santoshi Nakomoto’s perfectly decentralized currency, Chinese miners are still “in the game” for crypto, hosting top 4 of the largest mining pools including Antpool, ViaBTC, F2pool and BTC.top while contributing more than 70% of the power breakdown.
In response to crypto website bans, Bitcoin enthusiasts are now cowering for shadows of foreign real estate as a way out of scrutiny, diversification of investment, even evasion of taxes as bitcoin exchanges are not currently required to report the trading activities of their users and the government cannot know what you may have earned or lost in trading bitcoin.
The favorite “spots” for crypto based buyers are in the U.S. where home values have gone up 8.1% over the past year and Zillow predicts they will rise 6.5% within the next year.
The United States real estate industry is exploring several ways to incorporate Bitcoin usage and revamp inefficient processes. U.S. based crypto startups are now seeing an increased traffic of real state queries from Asia while multiple websites like CryptoSlate and QuantumRE have sprung up with bitcoin listed as acceptable currency for transactions.
The transaction chart for Propy, an organization which deals with cryptocurrency for real estate transactions, shows the spiking in crypto transactions for real estate. This coindata chart shows the spike in crypto transactions for Propy this July.
“At the moment, selling a house is still a very antiquated process with a mound of paperwork, but if everything like title and a buyer’s financials are available on the blockchain, the due diligence process will be dramatically shortened.”, observes Piper Moretti, a real estate agent in the Manhattan Beach suburb of Los Angeles.
According to SetSchedule, a California-based startup helping licensed real estate agents connect with buyers and homeowners, it’s getting common for Chinese bitcoin veterans to convert cryptocurrency into cash than to buy property directly because if a seller won’t accept bitcoin outright, then a buyer needs first to sell to a third party for U.S. dollars, Euros or another fiat currency. Many Chinese seek tokenized property rights through Hong Kong securities brokers mainly because real estate purchased in Hong Kong doesn’t require the same taxes and documentation as other financial assets held abroad.
The price oscillates from the usual 50,000$-10,000$ for nice little family homes to multi-million penthouses and private estates up for crypto-haul. Bitcoin Real Estate, a leading crypto currency supporting market, has seen requests of 620 BTC for a nice little 950-square-foot Miami condo to 1620 BTC for one magnificent Manhattan Midtown Luxury Mansion of unparalleled grandeur.
As of March 19, online bitcoin-only luxury marketplace, Bitpremier, has completed the sale of a fully managed villa at the deLMango Villa Estate in Bali, Indonesia, in what may be the largest reported bitcoin transaction to date.
Founder and CEO, Alan Silbert, indicates that the 3,000-square-foot villa sold for more than $500,000, though the exact price paid by the buyer was not revealed.
A 17th century Italian mansion is also up for auction on blockchain. Announced Friday, Beverly Hills real estate brokerage, Hilton & Hyland, is partnering with blockchain startup Propy to auction the Palazzetto inside the Palazzo Albertoni Spinola, a mansion built between 1580 and 1616. The UNESCO heritage site was designed by architect Giacomo Della Porta in the early 1600s, and is currently valued at $42 million, payable in cryptocurrency.
All in all, Chinese are not the only ones interested in crypto-bought real estate. Brick and mortar retail is facing a threat from online shopping. Our neighborhoods are changing around us, and blockchain real estate is poised to become part to accelerate that change.