The exchange of cryptos for property, whether through purchase or through rent, is nothing new. Indeed, new records were set in 2021; Yahoo recorded the $29 million value offering of one NYC property with the realtors only accepting digital currency. However, while cryptocurrency is in the market, it has arguably not stamped its authority in such a way that it becomes part of the everyday discourse. This is set to change in 2022, and cryptocurrencies will finally start dominating conversation in that most lucrative of markets – real estate.
Taking control of mortgages
Very few people buy their properties outright – the biggest driver of the real estate market are mortgages. Indeed, one of the biggest parts of the home buying process is acquiring the home loan in order to finalize the purchase. There are three main ways that cryptocurrencies can disrupt this area of the market – in down payments, in the credit line itself, and in repayments. As it stands, all three are seeing movement, with the most development being seen in the down payment stage. NASDAQ most recently highlighted the rise of Milo, who are opening up more ways to use cryptocurrency as collateral. Elsewhere, companies are accepting payment of mortgage via cryptocurrency, although issuance of the loan is yet to be concluded in digital coins.
The impact that cryptocurrency is having on the wider real estate market is evidenced by the ongoing interest from the federal government. Bloomberg has reported that the administration is set to place itself at the center of the cryptocurrency debate – it wants oversight and control of the market and it expands, in order to regulate and ensure that their stamp is left on any movement in the property world. This will ensure fair growth and regulation in the market, but some analysts are suggesting that this could be more regulation designed to constrict growth.
Land of the future?
What about future property markets? Some analysts believe that the true future of property lies in the Metaverse, the series of digital worlds that are now being colonized by progressive action by Meta. According to CNBC, investors are already paying millions, largely through crypto, to have their own slice of land within the metaverse or, more commonly, their own homes and houses. While the world is entirely virtual reality, there are strong indications that the new frontier of property markets may be digital, especially as American home sizes shrink and people are increasingly confined to smaller spaces. If cryptocurrency can become the de facto currency of these online environments, it will position itself way ahead of classic fiats and be a transformative tool for future communities.
Just as digital currencies are the market leader when it comes to innovation and are, arguably, the future of currency, so is the metaverse. When it comes to digital property, crypto will reign supreme. That being said, crypto isn’t content with resting on its laurels, and 2022 will see it make big shifts in the physical property market.