There is a range of different things where bitcoin is regularly used as a payment option. These include things like spending BTC for online gambling, but also getting loans or buying regular items over the internet. The general discussion regarding not just bitcoin but also any other cryptocurrency easily ends up in a place where they are perceived as an investment, not a currency.
However, it is easy to disregard that all of them, bitcoin, in particular, was made to be an alternative to fiat currency. Without national borders, national banks or any other element that was used to define a currency before bitcoin came about, cryptocurrency operates in a very different manner than any national payment option.
Currently, one such payment gateway is seeing a huge uptick in transfers with the purpose of buying real estate property. As one of the biggest investments a private individual can make, the property has always been a benchmark of spending. The same applies to bitcoin as well, but also to the expected price trends for this cryptocurrency in the near future.
In Orlando, Florida, a luxury condominium complex is just the latest firm to create a partnership with BitPay. The same complex accepts bitcoin payments process for their real estate transactions. Grove Resort & Water Park is the business in question and on August 6 they announced that they will be accepting BTC for one of their 878 residents built on the condominium principle.
This itself is not huge news but shows a bigger and more important trend, which is the use of BitPay. This payment process service is fast becoming one of the go-to solutions for anyone looking to start accepting this cryptocurrency in the real estate market. Back in 2017, the same payment processing company transferred near $20 million from different deals in the real estate development and sales. In 2018, the crypto winter started in full swing and the same figure dropped to about $6 million.
Sonny Singh, the chief commercial officer of BitPay provided these figures but also offered a bit of an insight into 2019. During the first two quarters, the company has already processed above $5 million in real estate deals. Now, BitPay is on the road to doubling its business year-on-year.
BitPay is one of the leading companies in the field of crypto payment processing. In fact, according to sheer volume, it is the largest processor of BTC payments which moves around $1 billion yearly. Now, it is more and more acting as a payment processor for those who want to buy homes. Essentially, the company uses bitcoin payments that go directly to it and exchanges them into USD.
After that, it transfers the same funds to an escrow agent that acts on the behalf of the property buyer. Singh said that the company made its first real estate deal four years ago. Then it started working with Piper Moretti, a real estate agent based in California. Ever since BitPay processed millions coming from real estate transactions for both individuals and corporations. Now, 2019 seems like it is going to be a record year. Singh additionally explained that the money came from high-end clients.
The biggest single purchase came at $1 million for a single property. As he explained, the houses they are processing are not $30,000 homes. Currently, the company has long-standing relationships with a range of real estate agents and developers. These include JETre that provides properties in Manhattan and Magnum Reals Estate Company. Besides this BitPay is engaged in some of the biggest real estate hubs in the world.
These include juggernaut markets like the one in Dubai. Because of that, around 80 percent of BitPay’s transactions related to real estate are coming from abroad. However, almost 35 percent of their USD transactions come from domestic buyers in the US.
Grover Resorts Partnership
The latest partner that BitPay got is also a big regional property developer. Their condos come with a price tag that starts at about $330,000 and goes up to $600,000. All of these properties are located just five minutes away from Disney World, making them a premier location for many different investors. A representative of the company said that there is interest in the same condos coming from clients in China, Brazil, and Turkey, all of which are open to the possibility of buying units using cryptocurrency.
Grover believes that this is coming from bitcoin holders who are currently looking to diversify their portfolios. The developer chose BitPay because the company has a track record of a few hundred million in a transaction in real estate only in the Southeast of the US. This all amounted to a credible business partner and Grover made their decision easily when they chose this crypto payment, processing provider.
The use of crypto payment options is not just about having access to clients who wish to spend their bitcoin holdings on real estate. Instead, it offers a series of big advantages that are clear when the transfer is compared to bank wire. A BitPay processing charges about one percent for the processing fee, while a bank wire charges about five percent.
Crypto settlements are completed in seconds, while a bank transfer takes days to come in from the moment it is undertaken by a buyer. Furthermore, while Grover and many other real estate businesses only accept bitcoin at this point, the same can easily be expanded to other cryptocurrencies as well. This benefit applies to anything – from in-game esports payments to getting crypto loans.
But, like always when anyone is using bitcoin as a currency, it shows that this aspect of the cryptocurrency domain is widely underused. The mentioned countries – Brazil, Turkey, and China – have citizens who would have problems moving fiat from their nation to the US. Yet, bitcoin resolves all of that in seconds and ignores borders. This is a huge inherent value and just shows that the usability of cryptocurrencies, including the existing one, is still in its infancy. The future will definitely see many such additional examples, regardless of the price movement for any individual token.