Someone is selling their New Jersey house for $2.3 million in bitcoin - and it's a growing trend
- A $2.3 million house in Middletown, New Jersey, is accepting bitcoin as a form of payment.
- Bitcoin is becoming increasingly accepted in the real estate market with hundreds of listings accepting the cryptocurrency over the last six months.
- There are a lot of risks to using bitcoin for payment due to the cryptocurrency's volatility, but buyers and sellers are finding creative ways to deal with it.
A house for sale in one of America's most desirable places to live is accepting bitcoin as payment, a growing trend in the real estate market.
The Middletown, New Jersey, house was nominally listed for $2.15 million on Zillow in late January. The listing, however, stipulates that seller will accept bitcoin as payment based upon a "non-negotiable" sale price of $2.3 million.
Far from Silicon Valley and other tech hubs, the listing in Middletown, often ranked one of the best places to live in the US, shows just how far cryptocurrency and bitcoin have reached into the national conversation.
The listing is far from the only one in the US to accept bitcoin.
Over the last six months, an increasing number of real estate listings have begun accepting or requesting cryptocurrency for payment. There have even been some that only accept bitcoin as payment.
Bitcoin Real Estate, a website specializing in real estate listings that accept cryptocurrency, told Mercury News in late January that it has nearly 400 homes listed on its website.
Real estate website Trulia told Mashable last week that it had around 80 listings that mentioned cryptocurrency in some way, while Redfin said it had seen the number of listings accepting cryptocurrency rise from 75 in December to 134 in January.
Meanwhile, Ben Shaoul, the president of New York-based Magnum Real Estate Group, told CNBC in October that he plans to accept bitcoin as payment for condominiums in a building he is currently redeveloping in Manhattan's Lower East Side. Should a buyer pay in bitcoin for an apartment, which range in price from $700,000 to $1.5 million, Shaoul said he would hold the bitcoins as an investment.
A 1.4 acre home in Lake Tahoe, California, was the first home to be sold with bitcoin in 2014. It sold for 2,739 bitcoins, which were converted to $1.4 million cash by BitPay, a global bitcoin payment service provider headquartered in Atlanta.
Most real estate sales involving cryptocurrency have operated similarly. The parties agree on a fixed price in dollars and then decide on a fair exchange rate at closing. The bitcoins are then converted to cash by a third party, like BitPay, which are then given to the seller. Buyers therefore assume all the risk.
The problem with buying or selling real estate with bitcoin currently - or any other cryptocurrency - are the massive fluctuations in value on a day-to-day, and even hour-to-hour, basis. What seems like a fair exchange rate at the time, can seem like a steal or ripoff months later.
The first known real estate purchase using exclusively bitcoin (i.e. not bitcoin-to-cash conversion) occurred late last December.
Bitcoin aficionado Ivan "Paychecks" Pacheco paid 17.741 bitcoin to Frank Mainade Jr. for a two-bedroom condo in Miami's Upper East Side, reported The Real Deal. At closing, that was equivalent to $275,000 with an exchange rate of about $15,500 per bitcoin.
As of publish time on Thursday, those 17.741 bitcoins were worth $159,577.