Can you buy NYC real estate with Bitcoin? Sure.
Question: Can you really buy or rent something using Bitcoin? Is this a legitimate currency being accepted in New York City real estate?
— Blockchained in Brooklyn
Dear Blockchained:
Well, of course you can buy NYC real estate with Bitcoin. As you would expect in a city founded on an island purchased with a handful of beads and trinkets, you can buy real estate here with just about anything — if your seller is willing to accept what you offer.
That’s the real problem with Bitcoin or any other pseudocurrency: Who’s going to accept it? Whether the deal is quoted in Bitcoin, stock shares or pieces of colored glass and snipped tin, the value of whatever you pay with must be converted to dollars at a generally accepted exchange rate. If I offer you $1 million for your apartment, you and I both agree on what $1 million is. If I offer €850,000, we may quibble a bit, but we can settle on an acceptable offer because the exchange rate for euros and dollars is generally agreed upon and easily accessed.
Not so for Bitcoin. Bitcoin a highly speculative, highly volatile, limited commodity with no transparent market, its value in dollars bouncing wildly day-by-day, even hour-by-hour. On Jan. 1, 2018, one Bitcoin was quoted here at $12,956 and just $6,665 on July 16. Here, however, the values on those same dates are $17,231 and $6,653. Yet a third trading site quotes Bitcoin at $13,671 on Jan. 1 and $6,676 on July 16. So, as you can see, about the only thing everyone agrees on is that one Bitcoin is worth a lot less today than it was just six months ago.
So would you sell your apartment for something that’s lost half or more of its value in less than a year?
That said, there were Bitcoin apartment sales reported in March — deals for two Upper East Side condos — when the pseudocurrency was worth about $9,000. The Bitcoins were converted to dollars before any money exchanged hands, so the deals were Bitcoin transactions in name only. (A review of both transactions indicates that the closing prices, in dollars, were both higher than the asking prices.)
Call me old fashioned, but, while Bitcoin may be attractive in certain circles of the economy, overall, the cryptocurrency strikes me as a stupid idea. I mean, really. Twenty years ago, would you have asked: “Can I buy an apartment with Beanie Babies?”
David Crook is a veteran journalist and author of The Complete Wall Street Journal Real-Estate Investing and Homeowner’s Guidebooks. Do you have a question about anything real estate-related in NYC? Write him at askus@streeteasy.com. For verification purposes, please include your name and a phone number; neither will be published. Note: Nothing in this column should be considered professional legal advice. If you have a legal issue, consult an attorney.
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