It's amazing how times have evolved over the last few years. I can't tell you how many inquiries I was getting a few years back about "Can you buy property in Hawaii with Bitcoin or Crypto Currency?" Well, here we are in 2024 and a bit has changed. No pun intended with "Bit" Coin. What's been happening with crypto currency is it's obviously a volatile asset. I've never invested in it. That's my first disclaimer here. I can't give you advise on it, because I have not invested in it. Sometimes I regret that. However, I'm a Realtor and we're going to talk about how it plays into property here in Hawaii.
Trading Crypto for Real Estate
What was happening a number of years back is we were getting a number of people that were getting quite wealthy overnight with crypto currency and they wanted to cash in that asset for real estate here. What they didn't want to do is cash it out. What they wanted to do was do a trade with the seller. Ie - 'I'll give you my Bitcoin for your property". Well, as you may be aware crypto currency has come under a lot of government scrutiny over the last several years. You've probably watched the news and seen what's happened to Sam Bankman-Fried and a lot of the corruption that has gone on with the crypto. Here's another disclaimer - I feel like I'm going to get hammered here by all the crypto enthusiasts bashing on it. I'm not necessarily bashing on it. It's just outside of my realm (of expertise).
In any event, we had these buyers approaching us Realtors here on Oahu that want to buy property. I never really got into it. I started exploring it and i've been meaning to put this blog out for awhile. I'm now just getting caught up with all my business. 2024 has picked up a bit and I've been busy selling real estate. With that said, I still wanted to crank this out because who knows what the future is going to hold with elections this year and everything.
Regarding the process of buying property here with Bitcoin or crypto currency here in Hawaii, it's not as easy as you think. The irony was there were Realtors going around town peddling this, to sign up for webinars and seminars to buy real estate with crypto currency here and I have yet to see it done.
Will Title and Escrow Company Accept Crypto?
This past year, I sat down with some colleagues at a local title office and not only is it under scrutiny from the U.S. Government, but if I were a buyer of property, I would want to have title insurance. In order to do that, you are going to run it through a title and escrow company. They won't take crypto currency. They will only take U.S. Dollars because they do report their transactions to the feds.
First Hand Experience with Crypto Volatility
Here's a first hand experience I went through a few years back with a buyer that wanted to buy a property here with crypto currency. I'm not sure if you've heard about it, but Coinbase is a place where they can store their crypto. We received an offer on a listing of mine. It was a high end luxury property. The offer we received was based upon them selling or exchanging their crypto currency. Now, my seller didn't even want to go down that road of doing a swap for crypto currency. We were going to have that buyer cash it in for U.S. Dollars in order to buy the property. However, when they made the offer, their Realtor put a contingency in there that they would not cash out their crypto currency until they got past their home inspection period.
Just knowing the volatility of crypto currency, the offer was in U.S. Dollars. However, when you receive a statement of proof of funds from a bank, whether it's cash or stocks (even stocks aren't that volatile), you can take it pretty seriously. But, when we received their proof of funds, it was all in Coinbase and I was skeptical. Thanks heavens and I did protect my seller because during the time that we countered their offer on terms and price, what had happened is the crypto crashed.
Bitcoin Crash in 2021
What happened is this buyer could no longer afford the property that I had listed. I was not representing them, but I think their Realtor was a little disheartened because they couldn't move forward in buying our property. Their purchasing power dropped significantly. We took a little bit longer to sell after that. However, curiosity was striking me and I started to track crypto and what it was doing at the time. Then, when I saw it starting to rebound, Bitcoin was around $60,000 and dropped to around $30,000 (during the crash). Then it started to come back and sure enough I called the Realtor and I said I saw crypto was starting to rebound and did your buyer want to resubmit their offer. Maybe they'll cash out now that the price of crypto is back up? Believe it or not, they got so fearful that they ended up cashing out (earlier) and buying a $2 million condo.
$5 Million Home vs. $2 Million Condo
Just imagine.. With that volatility, you could have a $5 million house or a $2 million condo. That's how volatile crypto is. Right now, unless something miraculously changes with our laws, you can't really buy property in Hawaii with crypto currency. You're going to need to cash that out and exchange it for U.S. Dollars. So, I hope you found value in this article. If you have any questions about Hawaii real estate, feel free to reach out and give us a shout. Mahalo!