Since the creation of Bitcoin – generally accepted to be the first decentralised digital currency – almost ten years ago, questions abounded about the real value of cryptocurrency and whether it was/is a legitimate investment option. We’ve seen it used to purchase everything from comics and clothes to pizza and property, yet there are still many who do not trust the intangible currency. Regardless of your thoughts about its legitimacy, the fact is that it has and can be used to purchase and rent property internationally. So, exactly where does it fit into the local market? Let’s take a look.
To start, what is cryptocurrency?
“A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.” – Cointelegraph
That’s about as simple as it gets, even if it isn’t that simple. For our purposes, what’s most important to remember is that it’s a virtual currency that can be used to purchase physical assets. Furthermore, because it’s unregulated, it allows holders far more opportunities to invest where they otherwise wouldn’t be able to – think of foreign property buyers who must face regulations both in their home nations and markets abroad. There is a possibility of this leading to illicit deals, but that’s another story entirely.
Because the cryptocurrency is purely digital, it has no intrinsic value and is extremely volatile. However, that hasn’t stopped investors from pouring millions into the market, and new coins being created almost every day. It has led to an increasing number of agencies taking the risk of accepting it as payment for rent or purchase of properties. In South Africa, a small but growing number of agencies are also jumping on the bandwagon.
In June 2016, real estate agency Devler Estates became the first in the country to start accepting Bitcoin as a method of payment. At the time, Managing Principal Andre de Villiers said the following, “Bitcoin is gaining momentum all over the world, and with the Rand being so volatile it is likely to attract increasing attention in South Africa. It’s yet another example of Bitcoin increasingly becoming a real alternative currency and going mainstream in South Africa.”
Just over a year later Dreamblock (formerly ProsperiProp), a global real estate investment platform, threw its hat into the ring with the introduction of two crypto coins and the promise of low-level investment opportunities which combined traditional real estate investing and modern blockchain technology.
Are these pointing towards a trend? Only time will tell, but whether you believe the hype or not, and whether cryptocurrency will continue to grow as it has or fade into obscurity, the fact is there’s an opportunity to convert the digital currency into legitimate physical assets, and that’s nothing to scoff at.
Want to rent, buy or sell your property on the Atlantic Seaboard or in Woodstock, Cape Town? Berman Brothers Properties specialise in listing and selling your property and we have a variety of available houses, new apartments and other real estate options to ensure that you find your next dream home. Contact us on +27(0)21 439 9030 to find out more about the latest developments.
Also make sure to follow us on Facebook and Google+ for the latest tips on the property industry, as well as some of the most relevant news where we unlock neighbourhoods for you. Follow us on Instagram to see some of the gorgeous images of real estate in Cape Town and to share some of your landscape pics. A-list your property with Berman Brothers Properties, where property is done properly!