The Notting Hill Bitcoin mansion London Wall

Crytocurrencies such as bitcoin are starting to gain adoption in UK property sales.
Dual-advantage of generating publicity for the sale of real estate and attracting buyers who have bitcoin but are unable to convert it cheaply into fiat currency.
Wider use will remain hampered by bitcoin’s volatility.
LONDON — Selling a house in London is getting harder.

Data from Rightmove showed that four in 10 sellers are reducing prices, with London’s prime property market in the midst of a downturn.

But one £17 million mansion in Notting Hill has seen unprecedented interest since it went on sale in October.

“Last week we had 15 viewings,” said Lev Loginov, co-founder of property firm London Wall, which is selling the property. “It’s coming from Asia. I don’t think we’ve had anybody older than 30.”

The house is attracting interest from an unusually young demographic because it is being sold in bitcoin. Other houses in England have been offered for sale in the cryptocurrency before, but not on this scale, and not exclusively in bitcoin.

“It’s lots of young people who got involved in cryptocurrencies at an early stage,” Loginov said. “Most of them made money from mining cryptocurrencies, and basically they’re looking to acquire assets. ”

Considering news of the sale was picked up by dozens of media outlets — Loginov says he has given over 50 interviews in the past four weeks, and been featured by Reuters, Sky, even American site CNBC — it’s easy to see why cynics think this new generation of bitcoin property vendors might have marketing, rather than the virtues of crypto-currency, at the forefront of their mind.

Even news of a £375,000 new-build in Colchester, Essex managed to generate national headlines once it had a Bitcoin price tag attached.

“Cryptocurrencies are going to be the future”
So is free publicity the name of the bitcoin property game? Loginov says otherwise.

“The biggest benefit for us is that we as a company, throughout this process, figure out how to process property transactions in bitcoin,” he told Business Insider.

“We now know exactly how it works, what we have to do, and the steps we have to take. We believe cryptocurrencies are going to be the future.”

He notes other benefits. He says a bitcoin transaction is easier and cheaper from a technical point of view. A firm in the United States checks the legitimacy of his prospective bitcoin buyers, a process which Loginov says is “much cheaper” than the equivalent process for tracking fiat money, such is the transparency of blockchain.

Loginov said the reason they don’t simply convert their cryptocurrency holdings into fiat money is that “many of them do not have the mechanics to do it.”

The cost of processing bitcoin into fiat currency on that scale is also significant, which likely makes doing so less attractive.

A marketing gimmick?
If, then, the sale of a single house might make sense from a business perspective, bitcoin analysts are less convinced the property market will adopt the cryptocurrency more widely.

The biggest problem, according to Saurabh Saxena, founder of residential proptech startup Houzen, is the fact bitcoin and property appeal to fundamentally different types of investors. Property is a stable asset class, and bitcoin is highly volatile.

It’s purely a marketing gimmick

“I sincerely believe that bitcoin as a currency or exchange medium is not sustainable. It’s purely a marketing gimmick,” he told Businesss Insider.

“Developers typically raise money from pension funds or private equity. When a pension fund invests in real estate, they would typically expect a return of anywhere from 8% to 10%.

“Real estate is a low- to medium-risk asset class, and offers low to medium returns. Bitcoin is extremely volatile, and hence very, very high risk as a transaction medium.

“If the value is fixed, then a bit of global reach would make it acceptable for the industry but it’s not — the value goes up and down every day.”

A bitcoin bubble?
Mati Greenspan, a senior market analyst at trading platform eToro, agrees. “Most bitcoin property transactions are done using the fiat value of the property,” he told Business Insider.

Fixing the price in fiat value and converting it to bitcoin at the point of sale essentially means that the buyer absorbs none of the volatility associated with bitcoin, so long as they convert it back to fiat value once the transaction is complete (for what it’s worth, Loginov says he will keep most of the funds from the house sale in bitcoin).

A bubble only ends once all the players have maxed their positions

For as long as bitcoin remains volatile, Greenspan says, it will not see full adoption in areas like the property market.

“Once bitcoin adoption reaches full potential the volatility will even out as well but that could still be a while from now,” he says.

“More and more people are coming into the market on a daily basis and there are still many people who are intrigued but still on the sidelines. A bubble only ends once all the players have maxed their positions, and we’re still very far from that.”

Get the latest Bitcoin price here.>>

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