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April 13, 2018

You may need to pay extra if you want to buy a home with Bitcoin

by John_A

NurPhoto/Getty Images

With the surge in popularity of cryptocurrency, it’s becoming more acceptable to pay for things with Bitcoin. However, given the volatility of cryptocurrency exchanges, accepting Bitcoin can result in a loss for the seller if the market takes a downturn. One enterprising individual is hoping to cover any possible losses, and likely secure a gain, demanding a premium for accepting Bitcoin.

Hedge fund manager Claio Guazzoni de Zanett is selling his Manhattan townhouse, and potential buyers can pay the $30 million listing price in cash, with a mortgage loan through a bank, or use cryptocurrency to fund the transaction. If you use cryptocurrency, though you’ll have to pay $45 million. That’s a whopping 50 percent premium over the traditional list price.

No foreigner to cryptocurrency exchanges, Zanett is the founder of the Zanett Cryptocurrency Group and has been an investor in cryptocurrency and blockchain since at least 2015, according to CCN. “I’m a true believer in these networks, but it’s very volatile,” Zanett said of cryptocurrency exchanges in an interview with the Wall Street Journal. “They could be down 60 percent in two weeks.”

Zanett says he will accept Bitcoin (BTC), ethereum (ETH), or Ripple (XRP) for the transaction. The townhouse is listed as a six-story property in New York City’s Upper East Side neighborhood.

While Zanett asking for a 50-percent premium from buyers wishing to pay with cryptocurrency, he wouldn’t be the first to accept Bitcoin as a form of payment for real estate. One buyer in Colorado purchased a home for Bitcoin, but in a hybrid transaction scheme. In that purchase, the buyer slowly liquidated his cryptocurrency portfolio, converting his holdings into cash, which he used for the purchase.

Cryptocurrency investors could of course work their way around Zanett’s premium by selling their cryptocurrency holdings and converting their investment into cash. The cash can then be used to finance the purchase of the $30 million property, rather than transferring the cryptocurrency funds directly to Zanett.

As cryptocurrency gains momentum, it’s unclear if other real estate sellers or vendors would demand such a hefty premium when Bitcoin or similar funds are used in a transaction. In addition to Zanett’s listing, there are five cities around the world where you can use Bitcoin to pay for real estate, including Miami, Dubai, New York, Lake Tahoe, Nevada and Bali, according to Coin Telegraph.

If you’re looking for a house to buy, be sure to check out some of the best real estate apps available on mobile.

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