Crypto is still popular: Here’s what your customers need to know

For many, crypto is synonymous with cryptic. However, in the luxury real estate industry, the affluent clients we work with are often savvy investors who are keen to learn more about cryptocurrency coins, exchanges and markets, as well as the opportunities and risks they present. As blockchain-based technologies continue to spread and evolve, it could change the way luxury real estate is bought and sold in the future.

Personally, I’m no stranger to crypto – the concept appealed to me immediately. I was inspired to make my first investments in 2017 and am now the owner of a crypto mining company. Since then, I have traded hundreds of times on a personal basis, including paying for goods, services and NFTs, along with investing in over 100 cryptocurrency projects.

This place can be a roller coaster ride, with soaring highs, plummeting lows and sharp turns. That’s why it’s inevitable that customers will have questions about crypto, and why it’s critical that we, as agents and trusted advisors, can share accurate, fact-based insights with them.

The Prospects for Crypto in the Luxury Real Estate Industry

Brian Hawkins and Cyrus O’Bryant – Realogics Sotheby’s International Realty

As you’ve probably heard, the crypto pendulum is currently swinging, and people have mixed reactions to that volatility. Overall, I find that the main emotion among the individuals I talk to is curiosity, and many are seeking more information about exactly what cryptocurrencies are and what purpose they serve.

As for the sentiment among investors and colleagues in the crypto space, it is largely optimistic. It may surprise you, but the truth is that there has been a lot of hyped-up speculation in the market, and a correction was inevitable before it can return to a more stable, profitable state.

And while it is still early days for blockchain technology in luxury real estate, we are already witnessing the emergence of exciting new trends, such as selling luxury properties as NFTs.

Once the NFT is created, you can use a smart contract to state that you have built a unique property in an exceptional location, and cite it as the creator. You will then receive 1% of the proceeds every time it is sold – no matter how many times it changes hands. This is a huge advantage for investors and developers building iconic properties, and it’s just scratching the surface of what’s possible.

So when your customers come to you seeking a perspective on crypto, what can you share with them to provide a strong foundation for further research and investigation?

Tip #1: Beginners can familiarize themselves with Bitcoin

Brain Hawkins and Cyrus O’Bryant-Realogics Sotheby’s International Realty

I recommend starting with the most proven and trusted cryptocurrencies. Bitcoin is the closest thing to digital gold, because there is a limited supply of 21 million. My advice to clients is to begin their crypto education with Bitcoin as a way to ease their way into this space.

Tip #2: Help customers learn about the Ethereum blockchain

Another big name in crypto that clients may be familiar with is Ethereum, the platform on which most of our Web3 technologies are built. It provides a base layer on which about 90% of new crypto projects – including NFTs – are built and run.

Tip #3: With crypto, investors need to see the big picture

When people are afraid or skeptical about crypto’s fluctuations in value, I like to remind them that it is crucial to look at the long-term growth potential. I strongly encourage potential investors to have a 10-year perspective: they should designate a portion of the funds that they do not need immediately, and commit not to touch these initial investments for at least a decade.

Advice to buyers: be sure to cash out before the sale

Brian Hawkins and Cyrus O’Bryant – Realogics Sotheby’s International Realty

For luxury home buyers who want to consider trading their cryptocurrency investments, there are two things they need to know. First, the purchase will create a taxable event, just like any other form of payment. Second, due to the market trends and daily fluctuations, it is beneficial to withdraw before buying. Buying and selling crypto is very similar to trading stocks.

Advice to sellers: only allow commonly traded currency

If a seller is considering accepting cryptocurrency as payment for their home, the same advice applies. Valuations can change in a matter of minutes, so to reduce uncertainty, I would recommend only taking widely used and well-respected currencies – especially Bitcoin. So, to maximize future returns, I would have intended to hold onto that Bitcoin for at least five years.

In summary: play the long game, and play it intelligently

There are two main takeaways here. Number one is that currently customers considering cryptocurrency, whether for investment or transaction, should only focus on Bitcoin. Currently, most other currencies are too variable and volatile.

Number two is that the probability of building and preserving generational wealth will increase significantly if the investments are held over a longer period of time. It is possible that in the long term cryptocurrency will provide even greater preservation and growth of wealth than real estate.

Brian Hawkins

Born and raised in the Pacific Northwest, Brian’s knowledge of the Greater Seattle area and Eastside is invaluable to his clients. He navigates each enclave with poise, educates his clients through each phase of a transaction, and even provides insight into the best restaurants, shops, and parks in each community. A proven leader in the field, Brian Hawkins leads with integrity, discipline and honesty. Working with Cyrus O’Bryant, Brian has created a top team at Realogics Sotheby’s International Realty, with over 330 transactions and an impressive total sales volume of $154 million.