Crypto and Buying a Home what you need to know
If you’ve ever walked around at an arcade with a couple of pocketfuls of game tokens or won similar tokens at a fair to be exchanged for candy and stuffed bears, you already know how cryptocurrencies work. Except for cryptocurrencies, like Bitcoin and Ethereum, are digital currencies that can be used to purchase goods and services.
Today, there are more than 6,700 types of cryptocurrencies, some better known than others. Traded as commodities on the stock market and known for their volatility, cryptocurrencies have become increasingly mainstream as more people invest in them and trust the blockchain technology employed to secure them. In fact, some people are using their crypto assets to purchase large, expensive items—like houses!
Introduction to Cryptocurrencies
Major cryptocurrencies such as Bitcoin, Ethereum, XRP, and others are digital form of currency. Once you own them, you can use them to purchase goods or services.
Although banned in some countries such as China, major digital currencies are growing in popularity in the U.S. and other nations around the globe.
Increasingly, companies like Microsoft have begun to accept these currencies as a form of payment. In fact, you can even book airplane flights on some platforms using your crypto.
As cryptocurrencies mature and become more widely accepted around the world, people who use them to purchase large, valuable items like homes or even yachts will become less an anomaly and more commonplace. In fact, the normalization of these digital currencies may actually help to tame their historic volatility on the market.
So, while they may become subject to more regulation, taxes, and more widespread acceptance, they’re also likely to achieve more stability, and that’s good news for crypto
investors who want to use their assets as collateral or payment on costly goods and services.
Buying a Home with Cryptocurrency
Using cryptocurrency to purchase real estate is perfectly legal in countries where crypto is accepted, providing both the buyer and seller agree to transact the deal using whatever kind of crypto is on the table.
That’s the sticking point: Both parties must agree to the use of crypto. Sellers who accept this form of payment can retain it as their crypto-asset or they can transfer their Bitcoin or another crypto into dollars using a conversion service like BitPay.
In the US, BitPay has been involved in a number of real estate transactions when the seller was willing to accept crypto so long as it was converted into dollars during the deal. One of the most valuable real estate deals handled by BitPay sold for 2,739 Bitcoins, which, at the crypto’s current value, converted to roughly $1.6 million.
On the other hand, some real estate sellers are perfectly content to allow their payment to remain in crypto form, and that trend is likely to continue and grow as digital currencies become less volatile and more widely accepted.
What Are the Pros of Using Crypto to Purchase Real Estate?
If you have crypto, you might find it easy and convenient to use it to purchase your next home. On the other hand, if you find a property that suits you but the seller isn’t interested in your Bitcoin, there’s nothing preventing you from cashing it in yourself and paying in dollars.
However, there are some benefits to bringing your crypto assets to the bargaining table.
When you have a valuable crypto asset, you’ll find that you have something that’s increasingly in demand. In fact, you may have already noted that some sellers are advertising that cryptocurrencies are welcome.
While many sellers are prepared to convert their crypto into a dollar amount immediately with the sale of their property, others view the crypto like the commodity it is—something that could very well go up in value. Certainly, it’s a gamble—and the risk doesn’t always pay off.
But sellers who don’t mind playing the waiting game can hang on to the crypto until they feel comfortable converting it at the right time, making a nice profit.
Locks in Profits
If you have crypto, you might be feeling a bit squeamish because of its historic volatility. You, too, may wish to convert your asset into a different type of asset like a house that will allow you to more reliably lock in your profits. Your real estate purchase is an investment, too.
If you’ve noticed that your Bitcoin or Ethereum is ranging in value a bit too much for comfort, you may be ready to turn your crypto asset into a less-volatile real estate asset. And that’s not usually a bad investment decision—particularly if you buy a property that’s safely expected to appreciate in value.
What Are the Cons of Using Crypto for Real Estate Transactions?
There are some downsides when it comes to paying for a house with cryptocurrencies. However, you’ll want to weigh your own specific circumstances in light of each.
Crypto’s Limited Availability
First, cryptocurrency still only involves a small number of real estate deals. Only a very small percentage of sellers are open to accepting crypto or even advertise that they are open to this form of payment. In fact, the use of crypto for home deals is still in its infancy.
While it is increasingly used to purchase commercial property, it’s still new in that marketplace, too. Nevertheless, these transactions are growing in number.
It’s a Gamble
The cryptocurrency in your possession is associated with a value. That value may fall after you purchase your house with it—which means you let go at the right time—or it might rise, leaving the seller with the profit that could have been yours had you hung onto it longer.
In this way, buyers are taking a gamble by using their crypto and forfeiting the opportunity to enjoy a significant profit should the crypto enjoy phenomenal value growth. On the other hand, remember that property, too, is an investment that may appreciate in value.
It’s Complicated: Taxes
Cryptocurrencies, being effectively unregulated, can be frustrating at tax time. There is a capital gains tax that you have to be aware of any time you spend, trade, or exchange your crypto.
If you plan to exchange your cryptocurrency for a home, you should definitely involve an accountant who is experienced with these types of crypto real estate transactions. Many CPAs are investing time and energy into understanding the ins and outs of crypto trading.
Crypto is Volatile
One of the reasons you might be tempted to use your crypto to pay for a home is because of its volatile nature. Even as you decide to pay with crypto and begin your hunt for a house, your Bitcoin or other crypto’s value could rise—but it could also tank, forcing you to make other payment arrangements or to pay with more of your digital currency than you had expected.
Sell Your Cryptocurrency for a Downpayment
If you’re planning to finance part of your home, you may want to consider converting your crypto into dollars in order to make your down payment.
This certainly sounds simple enough, but banks tend to be a bit nosy about where you obtained your down payment and may want to have proof that you’ve had this money for a period of time before approving your application for a home mortgage.
However, you can provide proof with a bit of diligence. For instance, you need to keep track of all of your transaction dates such as each time you purchased the cryptocurrency and those transactions’ blockchain IDs. Banks, of course, are used to viewing statements, so yours may be unused to dealing with blockchain.
On the other hand, you can always put the converted dollars into your savings or checking account and let it sit there for a period of time—about 60 days—in order to satisfy the bank.
Qualifying for a Mortgage with Cryptocurrencies
Your cryptocurrency is an asset. No, not all banks understand that asset, but they’re increasingly becoming obligated to do so. In fact, major mortgage loan companies like Fannie May have indicated that Bitcoin can be used as collateral to secure a home mortgage loan. However, these lenders have a strict requirement that the Bitcoin
transactions must have a strict paper trail that includes documentation of your original crypto purchases and documents showing their sales. This can amount to quite a bit of paperwork, but if you don’t mind, you can qualify for a crypto-backed mortgage in this manner.
Is a Crypto Real Estate Deal for You?
When cryptocurrencies first came into use, few people dreamed they could be used to purchase real estate. Today, we know they can, and some people have already opted to use theirs to buy a home or commercial property. Is this the right move for you?
You’ll definitely want to weigh the pros and cons outlined here carefully. You might even want to consult with your crypt-experienced CPA before you rush into any real estate transactions.
The good news is, using your crypto is definitely an option you can consider, and it might be the ideal option for you.
Active Bitcoin Addresses Reach the Lowest Level in 12 Months
BTC traders remain uncertain about the price action due to the latest market volatility.
Bitcoin network activity has decreased significantly due to the recent price volatility. The world’s largest cryptocurrency dropped below $29,000 earlier this week but posted a strong recovery yesterday after BTC jumped above $34,000. However, bearish market sentiment returned in the last 24 hours as Bitcoin dropped below $32,500.
According to the latest data published by Santiment, the crypto analytics platform, the total number of active Bitcoin addresses dropped below 900,000 in June 2021, the lowest level since July 2020.
“Bitcoin is back at $32.4k after a rebound above a $34.6k high Wednesday. What remains to be seen is an uptick in address activity. On the 30-day rolling scale of daily active address scale, July 13, 2020, was the last time the BTC network was this low,” Santiment mentioned.
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Earlier this week, Finance Magnates reported about the surge in liquidations across the crypto market due to the recent dip in Bitcoin and other digital currencies. During the last few weeks, Bitcoin-related investment products saw significant outflows. According to the latest report published by CoinShares, nearly $89 million worth of investment left BTC investment products last week.
Despite the latest rebound in BTC and other cryptocurrency assets, traders remained uncertain about the future price action of the world’s most valuable digital asset. “Bitcoin’s fear, uncertainty, and doubt (FUD) remain high, as traders are polarized on whether prices can push back below $30k again. For now, though, prices have jumped back on crowd fear. Markets move in the opposite direction of crowd expectation,” Santiment highlighted on Twitter. The total market cap of BTC is currently hovering at around $600 billion. During the last 24 hours, Bitcoin’s crypto market dominance dropped nearly 1% after the latest surge in digital currencies like Dogecoin (DOGE) and XRP.
Earlier this week, Jim Cramer, an American television personality and the host of CNBC’s Mad Money, expressed his concerns regarding China’s Bitcoin mining crackdown announcement and mentioned that he has dumped his Bitcoin holdings.
Bank for International Settlements backs Central Bank Digital Currencies
The BIS, which is often called the central bank to the world’s central banks, set out recommendations on June 23 as to how a CBDC should be.
It estimated that around 56 central banks and monetary authorities around the world are now looking at digitizing their currencies as commerce shifts online, as reported by Reuters.
The momentum comes as usage of physical cash has fallen in the wake of online e-commerce portals and pandemic-induced lockdowns.
The big bankers also see decentralized currencies such as Bitcoin and “Big Tech” as a threat, especially the likes of Facebook and its plans for its own cryptocurrency Diem, formerly known as Libra.
Head of the Innovation Hub at BIS, Benoît Cœuré, warned that without CBDCs, digital money would become increasingly dominated by big tech firms. Describing the scenario as a loss of control of sovereign money, he added:
“That is a place where you don’t want to be, where governments don’t want to be,”
China Leading CBDC Race
According to the report, The Bahamas became the first country to officially launch a general purpose CBDC, known as the Sand Dollar, in October.
China is well on the way to becoming the second.
Earlier this month, Chinese authorities hand out $6.2 million in digital currency to citizens of Beijing for a trial of its digital currency/electronic payments (DCEP) platform.
The Beijing Local Financial Supervision and Administration Bureau allowed citizens to apply for the handout by using two banking applications. The giveaway was part of a lottery system using “red packets” valued at 200 Yuan a piece (around $30).
The southwestern city of Chengdu handed out around 40 million Yuan in digital currency in February this year. Shenzhen also completed a digital currency trial in October 2020.
China also has plans to expand the trials with foreign visitors at the 2022 Beijing Winter Olympics.
More Study, More Regulation
While China forges on, governments in the West are dragging their feet over regulatory woes.
Earlier this month, Republican Maxine Waters announced a task force on Financial Technology that will study cryptocurrencies and CDBCs and their impact on the U.S. economy.
In April, CryptoPotato cited a PwC report that revealed 70% of the world’s central banks are “nowhere near” launching their own CBDCs.
John McAfee’s Strange Suicide Leads To Even Stranger Conspiracy Theories
Today is a sad day for the crypto-verse. For good or bad, John McAfee, one of the most eccentric, bizarre, and influential personalities of the ecosystem, said his goodbyes to the physical world in a no less eccentric, bizarre, and controversial way: He committed suicide by hanging himself from a rope in his prison hours after learning that the Spanish justice system had approved his extradition to the United States.
The news was first announced by his lawyer and later confirmed by the government of Catalonia, the region of Spain where McAfee was imprisoned.
“Everything indicates that it could be a death by suicide.”
Immediately after the news broke, the Crypto Twitter community quickly shared their shock. Some paid respect, others criticized… and others questioned everything that happened.
The conspiracy was easy to imagine, given McAfee’s background. Several cryptocurrency influencers began trying to tie up loose ends to understad what happened. They relied on several tweets from McAfee claiming that he would never commit suicide, that he was being threatened, and that he knew some secrets that the elites needed to silence.
But something that blew everyone’s minds was a picture uploaded post-mortem to his official Instagram account. A black letter Q, presumably pointing to the QAnon movement, though without explanation.
QAnon, or simply Q, is a conspiracy movement that claims that a group of satanic pedophiles dominate government and media elites. Its followers claimed that former President Donald Trump was waging a battle to destroy this group.
The movement gained momentum with the arrest of Harvey Epstein on sex charges. The suspicious causes of his controversial suicide prior to his testimony further heightened suspicions that he had in fact been murdered in order to be silenced.
The slogan “Epstein didn’t kill himself” went viral and is still observed when references are made to corrupt government practices in the United States.
And, of course, McAfee had a thing or two to say about this. He pointed out to similarities between his case and Harvey Epstein’s in many times, and assured he had many secrets that the government wanted to hide. If his allegations are true, and the QAnon post means anything, we could soon find out what he knew.
For you panicked people involved, even peripherally in Epstein’s murder:
I do, absolutely, 1,000% have, not just a dead man switch, but a twice daily check in switch.
If you think you are fast enough to grab me, torture me and get what you need before it activates,
— John McAfee (@officialmcafee) January 16, 2020
“McAfee Didn’t Kill Himself”
A Twitter user attempted to contact the administrator of the controversial right-wing news site Zero Hedge and introduce him to a Spanish journalist who claims to have video recordings and reports that Joe Biden allegedly teamed up with the Prime Minister of Spain, Pedro Sanchez, to fake McAfee’s suicide.
— ブランスさん (@brunsjpnrmu) June 23, 2021
MMCrypto, a cryptocurrency trader, also questioned McAfee’s suicide. He shared a tweet from McAfee in which he assured that if he were to appear dead, it would not be by his own decision, and everything could be a set-up “a la Epstein.”
Podcaster Peter McCormack shared the ticker $WHACKD in reference to another McAfee tweet showing a tattoo as a reminder that he would never commit suicide despite threats from US Officials.
— Peter McCormack (@PeterMcCormack) June 23, 2021
Getting subtle messages from U.S. officials saying, in effect: “We’re coming for you McAfee! We’re going to kill yourself”. I got a tattoo today just in case. If I suicide myself, I didn’t. I was whackd. Check my right arm.$WHACKD available only on https://t.co/HdSEYi9krq🙂 pic.twitter.com/rJ0Vi2Hpjj
— John McAfee (@officialmcafee) November 30, 2019
Also, Kim Dotcom, the man behind Mega.nz and active Bitcoin Cash advocate, claimed to be working with McAfee on an initiative to fight government surveillance shortly before the tragic news.
John was a colorful guy. A pioneer in data security. I always thought he partied too hard, should have avoided the drugs and focus on using his brillant mind for good. When he had a sober mind it was all about freedom. That’s how I will remember him, a freedom fighter.
— Kim Dotcom (@KimDotcom) June 23, 2021
And finance lecturer Vladislav Ginko also shared several tweets warning about the danger of McAfee and his family suffering from deaths caused by USAMRIID, the Department of Defense’s (DoD) lead laboratory for medical, biological defense research.
So far, no official autopsy has indicated his cause of death. In the meantime, theories will continue to emerge. But if there is one thing that everyone – conspiracy theorists or not – can agree on, it is that John McAfee lived his own way until the end.
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