Cryptography has just become the hottest new thing in real estate. Here’s what the Bitcoin revolution means for buyers, sellers, and developers

Adaptation from an evolutionary perspective is inherently an unaccelerated glacial process.

It’s moving slower and more painfully when it comes to fundamental changes to the rules by which the real estate industry is playing out – many of which are still too old to be as irrelevant and ineffective as phones still attached to the wall.

Which is why everyone — brokers, realtors, developers, buyers, sellers, and investors — should pay close attention to the current wave of crypto-real estate that has not been quietly sweeping Miami for months.

Last June, I broke the story about the largest known crypto-real estate deal in America to date, which was a Miami Beach penthouse apartment that was traded for $22.5 million in crypto-equivalency at Arte by Antonio Citterio, located one floor below where Ivanka Trump and Jared Kushner were. He has been holed up for months.

Since then, the crypto-housing romance of Miami has turned into a full-blown and politically-celebrated tsunami that is poised to flip the fundamental financial fundamentals upon which the entire industry is treated as bigger and more powerful players than ever before. Looks ready to jump. In the process, the wave will likely drown out anyone else who isn’t interested in keeping up.

To be clear about this whole thing about bitcoin meeting since I’ve been tracking it for a while: a lot of frothy froth for years has been exactly it – foam without following the actual operations, partnerships, and exchanges that would make bargainable and regulated digital real estate deals possible.

Cryptocurrencies, in general, until recently also continued to suffer from a fundamental understandability problem, which, not surprisingly, has hampered their adoption with buyers still apprehensive about betting the biggest fortune-generation decision of their lives on a combination of servers, zeros, and ones. Housing and real estate investing is already fraught with financial risks (the Great Recession, anyone?). So why pile it on with more suspicion by injecting a crypto agent that makes everyone more confusing in the first place?

For most developers and investors—many of whom have made billions during their careers selling homes and condos the old-fashioned way—the potential new normal for real estate crypto remains uncharted territory as well. Right or wrong, replacing the base currency on which empires have already been built over generations is causing fear. Because no matter how outdated the current rules and goal posts are, everyone at least knows how the game is played and the inefficiency bonus to take advantage of.

But since last year, the current crypto-real estate boom in Miami has been challenging all these conventional ideas.

In the process, it also lays out the potential bars of a new financial framework for how buyers and sellers sell that could extend to other frothy real estate markets in tech-focused cities like New York, San Francisco, Austin and Los Angeles altogether. As fast as it took root in Miami.

If that happens, the implications for real estate are quite significant. For early adopters and developers who realized early on that cryptocurrency is legitimate, enforceable, viable, efficient, and here to stay, it also raises the more strategic question of how far the crypto-real estate revolution can go, and what it will take to stay ahead of the curve. Once everyone jumps.

“Innovation has always been at the forefront of our business,” says Camilo Miguel Jr., founder and CEO of real estate firm Mast Capital and developer of the recently launched Cipriani Residences Miami, the first Cipriani-branded apartment complex in the US. It is clear that cryptocurrency is the next generation of wealth and will become an important factor in real estate transactions in the future. Next generation buyers are individuals who want the ability to quickly and easily diversify their real estate investment portfolio, and the combination of blockchain and crypto allows them to do so.”

So it comes as no surprise that this week’s announcement that Cipriani Miami will begin accepting crypto deposits through the FTX crypto exchange in conjunction with the opening of the Formula 1 Miami Grand Prix this weekend is yet another sign that the crypto wave in Magic City is here to stay – Especially when it comes to international buyers keen to diversify their crypto holdings in the sweltering South Florida real estate market.

Miguel Jr. continues to race this weekend: “With a Formula 1 event sponsored by Crypto.com and FTX sponsored with Mercedes F1, this timing couldn’t be better for us.” “We have been consciously trying to define a platform that works for our luxury condominium sale business while providing a seamless cryptocurrency buying experience, and the solution we came up with with FTX achieves both.”

For anyone wondering what this “solution” looks like from a transactional point of view, here’s how it works:

With a leading cryptocurrency exchange platform (such as the NASDAQ cryptocurrency), FTX is able to convert Bitcoin, Ethereum, or any other cryptocurrency into US dollars in a split second through an online exchange regardless of what the transaction is based on in terms of value, for example Example, Picasso-backed NFT (non-fungible token), Bob Dylan’s song lyrics, or The Penthouse One Floor Below David Beckham.

In purely real estate terms, this means that a buyer from anywhere in the world can place a pre-construction deposit on a Miami condominium with any cryptocurrency moving from their digital wallet to a traditional US escrow account in the amount of US$ equivalent with a withdrawal. From an application almost instantly – all while meeting the AML (“Anti-Money Laundering”) and KYC (“Know Your Customer”) SEC regulations that make street transactions legal and compliant in the first place.

For real estate developers on the selling side of things, FTX’s twisting velocity shift also mitigates the volatility of the infamous crypto market, ensuring that $22.5 million for a penthouse actually means $22.5 million when it comes to money in the bank at the time of the transaction.

“FTX’s first-of-its-kind conversion speed is what makes it a leader in the cryptocurrency market,” says Miguel Jr., and in addition to AML and KYC, we are clearly very concerned about crypto volatility as developers. FTX has allayed these concerns by allowing us to accept deposit payments made from all major cryptocurrencies into US dollars within seconds. They are respected in the Miami brokerage community, the namesake of the FTX Arena in the Miami Heat, and they have assigned a specific real estate focused team to work with buyers throughout their entire transaction to ensure the process is simple and seamless so that we feel confident about what we are doing and buyers can too. “

While real estate investors new to the game like Mast Capital in Miami are just jumping on the crypto train, Property Markets Group (PMG), a global real estate developer with a 30-year portfolio of hospitality, luxury and mixed-use residential real estate, deserves credit for sending it off the station. in the first place.

Last year, PMG became the first developer to partner with FTX and begin accepting cryptocurrency for deposits at the new Waldorf Astoria Residence. A few months later, they started accepting cryptocurrency at their new project, E11even Residences, up the street. Eight months later, this “proof of concept” exercise now means cryptocurrency deposits of more than 75 apartments in both buildings totaling over eight figures in pre-sale financing.

For what it’s worth, these aren’t little ball numbers.

Since last year, PMG has closed more real estate deals in cryptocurrency than any other developer globally. With more than $5 billion in real estate development planned over the next five years, every other developer should heed PMG’s announcement last week that it will now accept cryptocurrency as a payment method for all pre-sales and condos for sale. In all of their US and global projects in partnership with FTX – they became the first international developer to step in with all cryptocurrency and send an unmistakable signal to anyone else in the industry that digital currencies are the future of real estate, not a fad.

“For three decades, PMG has been committed to staying ahead of the innovation curve,” says Ryan Scheer, PMG’s general manager. “We are proud to be the first residential real estate developer to accept crypto deposits in pre-construction condominiums globally. This achievement is in line with our goal of constantly paving the way for innovation and staying ahead in the market. Accepting crypto deposits made sense for us as it is the embodiment of the latest technology “.

For international crypto investors and new millionaires in particular, many of whom hold volatile digital wallets with the goal of shifting their investments into more stable traditional asset classes such as real estate, the Miami crypto wave was also an opportunity that Share could see coming of the day. One.

“We saw an opportunity to allow people to diversify their crypto assets and easily transfer funds into stable physical real estate,” Scheer says. “And accepting cryptocurrency offers buyers an accessible way to do so and purchase units. Blockchain technology and digital currencies speed up the buying process and reduce barriers for international buyers, and are an essential tool for us when developing in a growing international city like Miami. International buyers can face Especially quickly buying an apartment while avoiding international fees and bank/wire transfers, crypto offers the opportunity to quickly transfer assets from international banks and exchanges to secure US investments.”

As for the remaining dangers, opponents, and resisters, there isn’t much harp left, Scheer adds.

“The success and record sales we saw at E11EVEN Residences Miami have proven to us that crypto deposits are the future of real estate and a tool we must use on all of our projects. Being an early adopter in any market is risky. But partnering with a company like FTX has given us the confidence to allow innovation to happen with Confidence that the growing demand for cryptocurrencies in Miami is here to stay. Similar to PMG, FTX has always been forward-thinking and committed to developing Miami as the center of cryptocurrency in America.”

At the rate that PMG and FTX are currently going, that pace will only accelerate and keeping up will be the biggest challenge for anyone else.

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