With Bitcoin and Crypto dropping, is real estate about to boom?

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With Bitcoin and Crypto dropping, is real estate about to boom?

Katlynn Teague

Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes

Good Morning BP,

Bitcoin and Crypo are dropping... What does this mean for real estate?

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Frank Jiang

Investor · San Diego, CA · Member since 2014 · 592 posts · 765 votes

Quote from @Nico Alianiello:

As crypto continues to grow I do think we will see crypto become more involved with real estate as transactions will be conducted more and more with crypto thanks to its almost instant settlement, as well as, the investment potential of virtual real estate within the meta verse. Eventually, I think traditional Titles and Deeds will be replaced by NFTs versions of them.

Cryptocurrency is a fad for people trying to get rich quick and people will slowly trickle out of it as it continues to demonstrate no value add to any real-world application.

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
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@Katlynn Teague
probably nothing... what do you think?
2 Reply
Brett Deas
CO · Member since 2022 · 588 posts · 426 votes
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The people who invest in bitcoin and crypto are typically the polar opposite of real estate investors. They love volatility vs real estate investors who typically don't have it.
5 Reply
Justin Hammerle
Realtor · Providence, RI · Member since 2022 · 404 posts · 262 votes
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Any correlation I think would relate to an increase in interest for real estate assets as a safer investment given the precariousness of the future economy.
1 Reply
Nico Alianiello
Real Estate Agent · Palm Beach County · Member since 2021 · 16 posts · 11 votes
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I don't think there is a direct correlation with Crypto and Real Estate as of now. However, because of the current economic landscape of monetary tightening and rising interest rates all markets will feel the wrath of a stronger dollar. Real Estate is no exception, with higher rates, buyer demand is slowed. which will prevent a "boom" from happening. However as Justin Hammerle said above, Real Estate has always been a safe haven asset for times of economic uncertainty and elevated volatility. Moreover, I think that this, as well as, inventory still being lower than pre-pandemic levels will prevent a "crash" from happening as well.
As crypto continues to grow I do think we will see crypto become more involved with real estate as transactions will be conducted more and more with crypto thanks to its almost instant settlement, as well as, the investment potential of virtual real estate within the meta verse. Eventually, I think traditional Titles and Deeds will be replaced by NFTs versions of them.
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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
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I have read the hype about crypto and Bitcoin and it's cousins, but have not felt the attraction. Don't see the relevance to REI unless of course you are buying properties with laundered money.
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Aaron BreckenridgePro Member
Technology · Dallas, TX · Member since 2022 · 486 posts · 311 votes
3y
About the only connection is that Tether is (maybe? 🤷‍♂️) backed by a lot of international real estate. That would indicate real estate and crypto are weakly correlated. A crash in international real estate prices could (finally) crater Tether, which seems to exist only to prop up the price of Bitcoin.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
Quote from @Katlynn Teague:

Good Morning BP,
Bitcoin and Crypo are dropping... What does this mean for real estate?

How is this correlated? Curious to it, genuinely.
1 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
Quote from @Justin Hammerle:

Any correlation I think would relate to an increase in interest for real estate assets as a safer investment given the precariousness of the future economy.

It'd increase the interest for T-Bills, not even real estate.
1 Reply
Frank Jiang
Investor · San Diego, CA · Member since 2014 · 592 posts · 765 votes
3y
Quote from @Nico Alianiello:

As crypto continues to grow I do think we will see crypto become more involved with real estate as transactions will be conducted more and more with crypto thanks to its almost instant settlement, as well as, the investment potential of virtual real estate within the meta verse. Eventually, I think traditional Titles and Deeds will be replaced by NFTs versions of them.

Cryptocurrency is a fad for people trying to get rich quick and people will slowly trickle out of it as it continues to demonstrate no value add to any real-world application.
6 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Katlynn Teague:

Good Morning BP,
Bitcoin and Crypo are dropping... What does this mean for real estate?

what kind of question is this.
Your grandma 100 years ago do not understand Bitcoin.
Your grandma 100 years ago would notice that Bitcoin is 200 percent scam.
The way you ask the question shown that it's milleneal issue LOL sorry to say LOL
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @V.G Jason:

Quote from @Katlynn Teague:

Good Morning BP,
Bitcoin and Crypo are dropping... What does this mean for real estate?

How is this correlated? Curious to it, genuinely.

Gen Z/Milleneal way of thinking is complicated man
0 Reply
Katlynn Teague
OP
Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes
3y
Quote from @Carlos Ptriawan:

Quote from @Katlynn Teague:

Good Morning BP,
Bitcoin and Crypo are dropping... What does this mean for real estate?

what kind of question is this.
Your grandma 100 years ago do not understand Bitcoin.
Your grandma 100 years ago would notice that Bitcoin is 200 percent scam.
The way you ask the question shown that it's milleneal issue LOL sorry to say LOL

Carlos, thank you for the feedback.
The reason for this question, is that Bitcoin and Cyrpto are seen as other types of investing. I was curious to see if people think that these types of investors would pull their funds out and start investing in real estate instead. Thus adding more people trying to purchase investment properties, which would increase competition in the market in turn would drive prices up.
0 Reply
Katlynn Teague
OP
Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes
3y
Quote from @Nicholas L.:

@Katlynn Teague
probably nothing... what do you think?

My thought process was, that these types of investors would try another route to investing..like real estate.
0 Reply
Katlynn Teague
OP
Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes
3y
Quote from @Justin Hammerle:

Any correlation I think would relate to an increase in interest for real estate assets as a safer investment given the precariousness of the future economy.

That is what I thought as well.
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Katlynn Teague:

Quote from @Nicholas L.:

@Katlynn Teague
probably nothing... what do you think?

My thought process was, that these types of investors would try another route to investing..like real estate.

This is a lot like saying why doesn't someone who invests in fine art, come out to a Barret Jackson auction and pickup a '69' Fast-back GT.
These are 2 very different kinds of investing, with very different underlying mindsets of persons engaged in each.
2 Reply
Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
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@Katlynn Teague
Nothing. Two non correlated asset classes.
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1 Reply
Alex L.
Rental Property Investor · Youngstown, OH · Member since 2023 · 128 posts · 124 votes
3y
Most people who use these forums assumes that crypto and real estate attract two completely different investing crowds, but as an RE investor myself who also works in the crypto-banking industry, they're incorrect.

There a lot of real estate investment companies (typically single or family run LLCs) that invest heavily in Bitcoin/Ethereum/etc. I know this because I'm the one who reviews their financials and legal documents when they open accounts, and also reviews their ongoing transactions. They park rental income or other money meant to help fund purchases/repairs in the form of crypto, in turn making a decent amount from the earned interest that they could turn around and exchange for USD (common), or transfer to other RE investors for property purchases/sales (rare). Well, there were a lot more of these companies doing this last year than currently, as most of the major crypto companies and exchanges have imploded. Still, there are a lot of RE investors who put a lot of their faith in crypto, many who are dabbling with more risky decentralized investing, while others are waiting for a particular bank or two which I can't name to offer up crypto custody services.

As for what it means for real estate... very little, in my opinion. I do think it may (and likely already has) drive crypto investors to look towards RE investing instead. The RE market goes so much deeper than crypto does, and even if there are a few thousand RE LLCs that invest their funds in crypto, they're a drop in the bucket, and RE is by and far primarily paid for via currency, not cryptocurrency.
4 Reply
Katlynn Teague
OP
Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes
3y
Quote from @Alex L.:

Most people who use these forums assumes that crypto and real estate attract two completely different investing crowds, but as an RE investor myself who also works in the crypto-banking industry, they're incorrect.

There a lot of real estate investment companies (typically single or family run LLCs) that invest heavily in Bitcoin/Ethereum/etc. I know this because I'm the one who reviews their financials and legal documents when they open accounts, and also reviews their ongoing transactions. They park rental income or other money meant to help fund purchases/repairs in the form of crypto, in turn making a decent amount from the earned interest that they could turn around and exchange for USD (common), or transfer to other RE investors for property purchases/sales (rare). Well, there were a lot more of these companies doing this last year than currently, as most of the major crypto companies and exchanges have imploded. Still, there are a lot of RE investors who put a lot of their faith in crypto, many who are dabbling with more risky decentralized investing, while others are waiting for a particular bank or two which I can't name to offer up crypto custody services.

As for what it means for real estate... very little, in my opinion. I do think it may (and likely already has) drive crypto investors to look towards RE investing instead. The RE market goes so much deeper than crypto does, and even if there are a few thousand RE LLCs that invest their funds in crypto, they're a drop in the bucket, and RE is by and far primarily paid for via currency, not cryptocurrency.

Alex, thank you so much for taking the time to answer my question!
This is helpful information, I knew there had to be a little bit of a correlation. Most investors are not one trick ponies.
1 Reply
Katlynn Teague
OP
Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes
3y
Quote from @James Hamling:

Quote from @Katlynn Teague:

Quote from @Nicholas L.:

@Katlynn Teague
probably nothing... what do you think?

My thought process was, that these types of investors would try another route to investing..like real estate.

This is a lot like saying why doesn't someone who invests in fine art, come out to a Barret Jackson auction and pickup a '69' Fast-back GT.
These are 2 very different kinds of investing, with very different underlying mindsets of persons engaged in each.

They are two very different asset classes however, there are investors who do use both. Investors are able to leverage the capital made in crypo to invest in real estate.
0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Katlynn Teague:

Quote from @James Hamling:

Quote from @Katlynn Teague:

Quote from @Nicholas L.:

@Katlynn Teague
probably nothing... what do you think?

My thought process was, that these types of investors would try another route to investing..like real estate.

This is a lot like saying why doesn't someone who invests in fine art, come out to a Barret Jackson auction and pickup a '69' Fast-back GT.
These are 2 very different kinds of investing, with very different underlying mindsets of persons engaged in each.

They are two very different asset classes however, there are investors who do use both. Investors are able to leverage the capital made in crypo to invest in real estate.

Just because a person "can", rarely steers what they actually do.
Fact is the factors that connect a person to have interest in investment real estate, in many ways is polar opposite to what connects many in crypto. You'll find some that do both, there is some Chef's who are also great musicians, that doesn't means Chef's are musicians.
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Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Alex L. "They park (some) rental income or (very little) ~~other~~ money meant to help fund purchases/repairs in the form of crypto"
I fixed your statement.

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Alex L.
Rental Property Investor · Youngstown, OH · Member since 2023 · 128 posts · 124 votes
3y
Quote from @Jaron Walling:

@Alex L. "They park (some) rental income or (very little) ~~other~~ money meant to help fund purchases/repairs in the form of crypto"
I fixed your statement.

Thanks, but actually you sort of rendered my statement incorrect.

Obviously it's subjective what some people consider to be "some" or a "very little" amount of money, but I would imagine most wouldn't say that a range of $50,000 to $500,000 USD worth of crypto fit those descriptions. Of course there are outliers, some who hold less or more, but you might be surprised to know that I most regularly come across accounts that had somewhere between $60k and $200k. Maybe you aren't.

Next time, perhaps consider adding a statement of your own rather than trying to alter someone else's which is based on their personal experience. As I mentioned in my previous post, it is my job to open and monitor these types of accounts.
2 Reply
Katlynn Teague
OP
Real Estate Agent · Atlanta, GA · Member since 2022 · 352 posts · 219 votes
3y
Quote from @James Hamling:

Quote from @Katlynn Teague:

Quote from @James Hamling:

Quote from @Katlynn Teague:

Quote from @Nicholas L.:

@Katlynn Teague
probably nothing... what do you think?

My thought process was, that these types of investors would try another route to investing..like real estate.

This is a lot like saying why doesn't someone who invests in fine art, come out to a Barret Jackson auction and pickup a '69' Fast-back GT.
These are 2 very different kinds of investing, with very different underlying mindsets of persons engaged in each.

They are two very different asset classes however, there are investors who do use both. Investors are able to leverage the capital made in crypo to invest in real estate.

Just because a person "can", rarely steers what they actually do.
Fact is the factors that connect a person to have interest in investment real estate, in many ways is polar opposite to what connects many in crypto. You'll find some that do both, there is some Chef's who are also great musicians, that doesn't means Chef's are musicians.

Absolutely, thank you for the feedback. It was not a generalized statement that all real estate investors invest in crypto and bitcoin. I was curious to know what the investors who do invest in both would think about the change. I should have clarified that more in my original post.
0 Reply
Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
3y
Quote from @Chris Seveney:

@Katlynn Teague
Nothing. Two non correlated asset classes.

Before I read this thread I would have thought the same thing, but after testing that assumption, it turns out to be incorrect, at a high level they are correlated, and relatively strongly.
Rough hypothesis, there is an exogenous variable tying these together. My bet would be interest rates. If I get the time, I'll get monthly fed funds rate and throw that in to the mix.
1 Reply
Dave SpoonerPro Member
Rental Property Investor · Cincinnati, OH · Member since 2020 · 870 posts · 823 votes
3y
Don't think there would be a correlation honestly.
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