Bitcoin—the first digital currency that works without a bank or middleman—has risen 183.6 percent during the previous month, from $5,870.37 per coin on Nov. 12 to $16,650.01 on Dec. 12, according to Bitstamp data. Its market cap is more than $293 billion, and although some analysts warn of a crypto bubble, others say Bitcoin could eventually compete against the gold market.
Redfin has seen cryptocurrency starting to become part of the discussion, with some clients buying and selling homes during the past three months. Real estate agents in Boston, Chicago, Houston, Philadelphia, Washington D.C. and several cities in California said they’ve had conversations with people about using cryptocurrency as part of their transaction. Meanwhile, Redfin found 75 listings nationwide in which the seller mentioned he or she will accept Bitcoin as payment.
One way to show the unprecedented growth of Bitcoin is to look at the price of the typical home in bitcoins during the past year. For instance, in January 2016 in San Francisco, the typical home would have cost a buyer 2,805 bitcoins. Today, the median home in San Francisco is 82 bitcoins.
For buyers who have made a lot of money on the recent surge in cryptocurrency value, buying a home is a reasonable way to use the proceeds. It’s riskier for sellers to accept Bitcoin, however, because accepting cryptocurrency as payment is a bet that it’s going to continue to increase.
“It’s hard to say whether the use of cryptocurrency to buy and sell homes is a long-term trend or just a blip based on the recent spike in value,” said Redfin chief economist Nela Richardson. “In some ways, cryptocurrency investors have just won the lottery, and so it makes perfect sense to buy their dream home. On the other side of the ‘coin,’ sellers probably wouldn’t accept lottery tickets as payment.”