A luxury condominium complex in Orlando, Florida, is the latest firm to partner with BitPay to provide bitcoin payment processing for real estate transactions.
Announced August 6, the Grove Resort & Water Park will accept bitcoin for purchases of their 878 resort-style condo residences. Yet, the relatively small update hides a larger story – BitPay is becoming somewhat of an established name in the real estate market.
In 2017, the company processed nearly $20 million in real estate development and real estate sales. Following the bottoming out of the cryptocurrency market in 2018, this figured dropped to around $6 million, according to BitPay's chief commercial officer, Sonny Singh.
In the first two quarters of this year, however, the company says it has already processed over $5 million in real estate transactions. Singh said BitPay is in line to double its real estate business year over year, as in 2018 the company processed $2.7 million in direct real estate transactions with "around twice as much via escrow companies and law firms acting as escrows."
BitPay, the world’s largest processor of bitcoin with about $1 billion in yearly business, acts as a payment processor for home buyers. The firm exchanges bitcoin into U.S. dollars and transfers the funds to an escrow agent on behalf of the buyer.
Singh said the company performed its first real-estate transaction through California-based real estate agent Piper Moretti about four years ago. Since then, the company has processed “millions” in real estate transactions for corporations and individuals, with 2019 looking like its top year to date.
According to Singh, the average price of a home purchased through the exchange is around $1 million. “These are not $30,000 houses,” he said.
The company has standing relationships with a number of developers and real-estate agents including Magnum Real Estate and JetRE, which deal in Manhattan properties. It also processes real estate transactions in some of the world's most expensive housing markets, including Dubai.
About 79 percent of BitPay's real estate transactions happened abroad, though 34 percent of the dollar value came from domestic U.S. buyers.
For their part, Grove Resort condos sell from $330,000 to $595,000, for a property five minutes outside Disney World.
In recent months, David D’Ambrosio, a director at the resort, said there’s been an uptick in potential clients from China, Turkey and Brazil inquiring about cryptocurrency purchases.
“It was easy to determine the potential market available,” said D'Ambrosio, suggesting that “bitcoin hodlers” were looking for a way to diversify their portfolios.
D’Ambrosio said his company contacted BitPay because the firm “has done a couple of billion in transactions, and at least a few million in real estate just in Florida and Southeast U.S."
BitPay charges a 1 percent processing fee and settles within seconds, whereas a bank wire charges around 5 percent and could take several days to come in, according to Singh. D’Ambrosio said, depending on the circumstances, Grove Resort “as developers could help contribute towards that [processing fee], we could help pay for the title fee.”
The resort currently only accepts bitcoin, but may add other currencies down the line.
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