The Trust Machine and Real Estate – Bitcoin and Houses

There has been a huge surge in Bitcoin prices. On October 31, 2015, the Economist published a compelling article title “The Trust Machine”.  The article explains how bitcoin and the underlying blockchain technology has promise. A lack of trust in worldwide governments and regulation will add fire to the spread of blockchains (and thus bitcoin).

Here are some fascinating charts. First is an ETF (Exchange Traded Fund) by the name of The Bitcoin Investment Trust. Look at the change in value of the last month.

Chart of the performance of bitcoin relative to the US Dollar over the last six months:

This is chart of a Bitcoin ETF over the last month

This is chart of a Bitcoin ETF over the last month

Chart of the performance of bitcoin relative to the US Dollar over the last month:

Value of Bitcoin to the Dollar over the last Month

Value of Bitcoin to the Dollar over the last Month

So, what is the impact on real estate? We think itcould be significant, and positive. This is another way to pay. Most Seller’s that receive bitcoin would convert to a tangible reserve currency. Bitcoin payment could be good for international buyers. International buyers have to anticipate currency fluctuations and the effect on the real cost of real estate to them. Bitcoin could eliminate some currency risk. There are multiple reports of property selling for Bitcoin. Since the Wall Street Journal reported on Lake Tahoe Property, there have been other reported sales of real estate in Bitcoin.

Real estate sales and brokerage have proven to be remarkably open and adaptive to technological change. We see the bitcoin revolution is something more driven by policy and trust, but has remarkable technology underlying it. We look forward to seeing how bitcoin impacts our business. In the meantime, nobody has asked to pay in bitcoin – maybe just a matter of time.

 

 

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