China’s crypto community is looking for new opportunities to invest internationally. Buying foreign real estate with Bitcoin is proving to be an easy and popular way to do that.
Chinese Crypto Community Trading Bitcoin for Real Estate
Have you considered selling a high-valued property for Bitcoin? If so, your buyer may have a name similar to Guo Hongcai, a Chinese beef dealer and early Bitcoin adopter who recently used Bitcoin to buy a mansion in California. He and Chinese residents similar to him are becoming increasingly interested in using cryptocurrency to buy foreign real estate without having to touch banks.
Chinese crypto millionaires could simply be looking for an easy way to diversify their investment portfolios. Despite worries about New York’s BitLicense and the difficulties caused by KYC and AML regulations, selling Bitcoin in the U.S. is easier than it is in China. The Chinese government’s and banking system’s relationship with the cryptocurrency community has been lukewarm at best and downright hostile at worst.
Blockchain-Based Real Estate Platforms Ready to Step In
Founders of real estate startups that work with blockchain and cryptocurrency have noticed the upswing in interest in their platforms coming from China. One unnamed founder reported that roughly one-third of prospective buyers were from Asia and were likely Chinese investors interested in buying properties in Hong Kong. The U.S. and U.K. are also especially popular requests, especially in regions most likely to produce technological innovations.
Propy CEO Natalia Karayaneva reported much the same thing: “The requests we have from [China] start at $50,000 or $100,000. … The latest one was $3 or $4 million for Silicon Valley.”
Considering that many property sellers are beginning to see the benefit of accepting cryptocurrency from foreign investors and crypto enthusiasts looking for a second home as payment for their properties, these platforms may start going mainstream within the next few years.
Opportunities in This Market?
Some experts believe that the Chinese willingness to use cryptocurrency to buy real estate could indicate real pain points in the Chinese real estate market beyond high taxes. Chinese real estate values are so high in some areas that prices have been called “exorbitant”. Developers have also faced a crunch from limitations placed on property development.
This and similar issues related to real estate around the world has led to the rise of platforms like Propy, in which investors can buy the real estate of their choice using cryptocurrency. Platforms similar to Brickblock, which supposedly sells shares in real estate, may also become popular with people who want to invest in real estate but don’t have the cash to buy a high-end property on their own.
On the flip side, Chinese investors often convert their cryptocurrency holdings into cash before using it to buy real estate. Industry insiders have noticed a recent drop in interest in making a straight-across trade of cryptocurrency for U.S. real estate, except in some high-value cities on the East and West Coast.
However, this is no reason to suspect that the interest won’t return. The ultra-wealthy such as the richest Chinese crypto millionaires will not ignore foreign real estate markets if recent Asian interest in platforms like Propy is any indication. Guo Hongcai even has a humorous name for his Californian mansion — “Mansion of Chives” — derived from the Chinese slang for the weak hands that tend to be shaken out whenever the crypto market takes a nosedive.