In what may be a first for a traditional real estate firm, Manhattan-based brokerage Bond New York has announced it will now accept Bitcoin as payment for real estate transactions.
"Bitcoin is a convenient and inexpensive way for our customers to transfer money, so we see it as a win-win situation which will impact the real estate industry," said Noah Freedman, co-founder of Bond New York.
Bitcoin image via Shutterstock.
The brokerage said in a statement that it believes it's the first brokerage to accept Bitcoin, and named a number of benefits for making the move. Echoing other Bitcoin adopters, the brokerage cited reduced or nonexistent processing fees as one draw of the currency. Bond New York said the currency also offered security undergirded by "military-grade cryptography," "identify protection" and "fast international payments," plus it "works anywhere, anytime."
In embracing the electronic cash, the brokerage joins a group in the real estate space that appears to be so far comprised only of tech firms.
In August, property management software provider Rentulations claimed to be the first company with immediate plans to accept Bitcoin. And last month, rental listings site RentHop announced it also would accept the electronic cash, even dangling a significant discount to those who pay in Bitcoin to list properties on its site based on the exchange rate at the time.
Reflecting an enthusiasm for the currency that seems to pervade the tech space, RentHop is apparently so pumped about Bitcoin that it's even overlaid Bitcoin's symbol onto its company logo.
Chris Toppino, co-founder of rental payment platform RentShare, recently said a top item on his wish list for 2014 was to buy and rent with Bitcoin, seeming to hint towards another company's plans to accept Bitcoin.
For all its purported benefits, Bitcoin has a glaring chink in its armor: The currency is known to fluctuate wildly. For example, when RentHop announced it would accept Bitcoin on Dec. 16, one Bitcoin was worth $760, according to RentHop. Two days later, after the Chinese Bitcoin exchange BTC China announced it wasn't accepting deposits for the immediate future, the value of one Bitcoin reportedly had plummeted to a low of $422.
That poses a risk to companies, particularly if they keep the amount of bitcoin they charge for a service constant, instead of pegging it to a fixed dollar price. RentHop wants to keep the exact amount of bitcoins it charges customers constant, and it promises to, unless Bitcoin's dollar value changes by more than 30 percent.
Which happened two days after it announced it would accept Bitcoin. (Bitcoin's value fell by as much as 44 percent.)
"At the end of the day, these hiccups will happen," said RentHop Co-Founder Lawrence Zhou when asked about the temporary crash in value last month. "BTC [Bitcoin] is very new, and the regulatory environment is still getting flushed out. As there is more infrastructure (both on the processing and the number of people accepting it) and global penetration, the magnitude of these moves should decrease."
Since the steep drop last month, Bitcoin's value has since recovered to about the level it stood at when RentHop announced it would accept the currency.
Despite Bitcoin's erratic record, businesses are increasingly transacting with it. At the least, jumping onto the Bitcoin bandwagon offers companies bragging rights, and at least for now, potential media exposure. That may change if Bitcoin goes mainstream.
A federal judge ruled in August that Bitcoin "is a currency or form of money," and during congressional hearings in November, lawmakers and regulators seemed sympathetic to arguments that the government needs to be careful to avoid hampering the digital currency's growth.
Venture capital firm Andressen Horowitz recently made the largest bet yet on the digital currency, investing $25 million in Coinbase, a firm that helps consumers and merchants use Bitcoin, Wired reported.