“Recently, Overstock.com — an online retailer — agreed to accept bitcoins; the Sacramento Kings basketball team will do likewise. According to coinmap.org, about 2,600 stores and businesses worldwide accept bitcoins, with concentrations in Western Europe, California and New York.”
–“Bitcoin: Is it a Boom, Or a Bubble?”; Robert Samuelson (Jan. 20, 2014)
Sooner or later, someone, somewhere is going to close a home sale using bitcoins* (Note: bitcoin is a so-called virtual currency that is causing a commotion in the financial press — if not general commerce — right now).
But, my two-fold guess is that: 1) it won’t happen first in the (conservative) Midwest; and 2) when it does happen, either the transaction will be quite large and/or the Seller will be (very) financially sophisticated.
Scenario(s)
That prediction has to do with Bitcoin’s heretofore extreme volatility.
So, a home Seller who left closing with $500k worth of bitcoins on Monday could easily find themselves with only $250k on Tuesday.
Or $750k!
If anything, those numbers understate Bitcoin’s roller coaster ride, given that the currency has fluctuated between $13 and $1,200 the last year.
12-Month Range: $13 to $1,200(!)
Who is best-suited to lay off** that risk — or diversified enough that they welcome it?
Financially sophisticated players with commensurately deep pockets.
Which is why my money (real, not virtual) is on either a Wall Street-type or a big, national builder to be first to use Bitcoin in the housing market.
*A quick Google search popped up this home in the Hamptons (Long Island) where the Seller apparently will accept payment in bitcoins.
**One of the ways to “lay off” — that is, hedge — a risk is by taking an offsetting position in another transaction. Another is by selling the risk to someone seeking it out.
That’s probably not something that the average home Seller is interested in/capable of doing.
Hmm . . . maybe that’s a business opportunity for someone(?!?).