Financial experts claim that a small percentage of physical money in the form of bills and coins is currently circulating through the economy. That amount is expected to decrease even more as a growing number of buyers and sellers rely on credit and debit cards to complete their transactions.
Another medium of exchange that has gained immense popularity is cryptocurrency. In looking at other types of currencies, while the British pound is among the oldest currencies that continues to be used today, the newer wave of Bitcoin is here to stay. What does this mean for real estate investments?
Over the past decade, the primary source of financing for real estate investments has initiated from global banks. However, recently, bank loans are not the only option, as buyers now have many private exchange options, including the digital currency system.
The Bitcoin Boom
Over the past few years, we have been witnessing a dramatic increase in the market capitalization value of global cryptocurrencies.
While the price of ownership share has varied significantly for Bitcoin, the digital currency continues to gain ground among buyers and sellers. Bitcoin offers the benefit of anonymous transactions, which works well for real estate investors.
Bitcoin users can make payments without fees and also bypass bank systems and government restrictions. This blockchain technology could have drastic implications on the real estate sector .
Real Estate Investing And Digital Currency
Real estate has already started showing signs of acceptance for bitcoins. A house in Essex, in northeast London, became one of the firsts in the world to be sold for bitcoins, for just under $500,000. This transaction has sparked industry-wide attention among experts keeping a close watch on digital currency in the real estate sector.
The Essex property transaction was completed after ensuring that all regulations were adhered to among all parties involved. A contract was drafted which protected both seller and buyer from the fluctuations in the exchange rates. The Land Registry agreed with the price being recorded in Bitcoin. However, according to the agreement, the buyer could also use pounds as calculating capital gains tax could get complicated with bitcoins.
The volatility of bitcoins is also a concern. The lack of regulation in visual currency is something that needs to be carefully considered. Bitcoin miners could find themselves at the receiving end of a problem if they try to engage in certain real estate investments. Many bitcoin minors have been unable to pass background checks, which has impacted investors seeking a profit in the UK real estate market among the rise of Bitcoin value.
Indeed, while some mortgage lenders in the UK have abstained from working with bitcoin investors, this emerging influence is not going away. The real estate market will eventually figure out a way to ensure all transactions are in the best interest of all parties involved, as evidenced by the Essex property deal.
Published on 2021-07-12 19:26:12