REAL ESTATE
Buying with Crypto
As discussed in Chapter 7 of our publication When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), and several previous blogs, the purchase of a home may be one of the biggest decisions, and investments, to make in one’s lifetime. Over the last few years, it has never been more difficult for young buyers, with rising inflation, property prices, and property taxes/insurance, and the situation appears to be only getting worse, with an increasing number of defaults and loans coming due.
Investors of real estate do have a few possible advantages, one being the ability to purchase within an IRA, which include certain tax advantages. Until recently, purchasing a home and/or mortgage approval, was based in dollars in the United States. Cryptocurrencies would need to be converted to dollars to complete a transaction, which would require taxes paid on any capital gains. Bitcoin, for one, could be used as collateral for a mortgage, however, the value of the Bitcoin was required to equal the balance of the mortgage. If the price of Bitcoin decreased, the mortgagee would then be required to make up the difference in dollars, or some type of collateral, similar to a “margin call.”
In the past few years, however, several companies began accepting Bitcoin (and some Ethereum) for homes sales/mortgages, including a few instances where sellers requested only crypto as payment. Most of these transactions would be connected to the blockchain, which could potentially rule out the need for a real estate agent. Only experienced home buyers should even attempt this process, however, as agents provide significant value to the process.
Some of these companies have exited this market due to the extreme volatility in the price of the coins. Though monetary systems are changing to tokenization throughout the globe, Bitcoin remains a mystery regarding its use case, whether it is a “store of value,” actual currency, and/or destined for centralization and government control. Some lending institutions may hesitate to accept this “money” as payment for property, as sudden plunges in price will immediately affect their balance sheet and asset values. For example, if a buyer purchases a home for the equivalent of $400,000, which would translate to 4 Bitcoin (when priced at $100,000/per), the lending institution would suffer an immediate 25% loss on a drop to $75,000 per Bitcoin, which occurred very quickly in the past month. The risk appears to be very high, regardless of the projected value of Bitcoin sometime in the future. Most of these transactions have required payment in full to avoid this potential issue, which makes a willing seller even harder to find.
These are some pros and cons to purchasing in crypto, all of which need to be taken into consideration…
Pros can include the speed of the transaction since it requires less paperwork and middlemen, due to the blockchain. The utilization of “Smart contracts” may also create the lack of need for a sales agent and closing attorneys, potentially saving a prospective buyer thousands of dollars in commissions and fees (especially for international deals money wiring costs and delays), although they would then forfeit the expertise that accompanies those professionals. If a buyer has previous experience buying property, they may be able to forego paying the professional agent, but legal representation should be always be considered, as closing costs will still be required.
Cons are currently a bit lengthier, as they include a higher potential for hacking and fraud, not to mention the safety and security of a traditional transaction. As mentioned above, the high volatility of crypto is also a major concern, even if the normal 4-6 week closing period is sped up, as an immediate dip in the price of the crypto will cause a loss of value in the property. If an agreement has been signed for payment in-full, and the active price of the crypto changes, the buyer may be forced to purchase more to complete the transaction. Purchase & Sales agreements are also structured differently and need to be fully understood, which may require an agent specializing in crypto sales. Re-Sale issues may also occur in the future, as a property value may come into question if crypto is no longer gauged in fiat currency. Tax implications, including capital gains, are another consideration for the holder of crypto, depending on the regulations in their geographical area.
One company, named OpenDoor (ticker symbol OPEN) is a pioneer in the industry, and made an announcement in early October, 2025, that they will begin accepting Bitcoin, Ethereum, and Tether, as payment options for real estate. This adoption is in its infancy, so heed caution with the process. The announcement immediately boosted the stock price of the company, but it has since dropped in half, so be sure to perform due diligence, and do not fall for the hype (FOMO), when deciding on an investment.
Another company, named Linkhome Holdings Inc. (ticker symbol LHAI), based in California, also launched a platform (in the Fall of 2025) enabling full real estate purchases with Bitcoin, Ethereum, and USDC. A steady rise in the stock price followed, although it has dropped about 90% since mid-November. Should one choose to invest, it may be wise to keep the position size low until the concept sticks for a longer time.
Should one decide to explore the possibility of purchasing property in this manner, consulting with a professional is still suggested as there are always changing regulations and procedures. Though this concept may grow successfully, there are many components of these transactions that need to be developed and legitimized.
Please visit the website www.augustassociatesllc.com for home values, listings, and professional assistance.
***As always, this information is not intended to be financial advice, or any specific buy or sell recommendation, but rather a guide to assist the reader in some further understanding of current economic conditions.
