Bitcoin has several use cases and it has crept into the real estate sector. Take the case of Brock Pierce for instance, who now owns a home in Amsterdam thanks to his Bitcoins. However, the Hollywood child star actor paid for the house while still holding onto his digital asset, according to a media outlet’s report on April 3.
Brock Pierce is the First to Exchange Bitcoin for Real Estate Property
Per the report, Nexo, a Swiss-based crypto credit line revealed that Brock Pierce is the first person in the world to buy real estate with Bitcoin without actually releasing his Bitcoins. The latter was made possible by issuing the virtual asset as collateral for a mortgage. He was then given the cash that will enable him to purchase a $1.2 million renovated Chapel-turned-home in Amsterdam.
Reportedly, Bitcoins worth about $3 million was used as collateral for the home. The Hollywood child star actor also holds over 95 percent of his net worth in cryptocurrency. While making comments about his purchase, Brock Pierce said:
Being able to borrow against one’s crypto assets gives one options, when wanting to purchase a property, and aligns with my philosophy that real estate and tokenization will be a quadrillion dollar market. I was able to hold on to my crypto and settle the transaction in fiat
Investors Have Confidence in Crypto Prices Surging in a Few Years
Antoni Trenchev, Nexo’s co-founder and managing partner who spoke to the media revealed that many investors are confident that the prices of cryptocurrencies will spike significantly in a few years time. As such, they do not want to let go of their assets even though they need fiat fast. In this case, Nexo steps in to receive their Bitcoin and other digital currencies as collateral while offering them fiat instead.
The managing partner added that due to the volatile nature of these virtual assets, twice the amount that is borrowed is usually demanded as collateral. Therefore, a person who wants to be funded with $10,000 will have to hand over collateral of $20,000 worth of Bitcoins.
Bitcoins are Stored With a Third Party Custodial Service
The Bitcoins are then stored with a third party qualified custodial service which neither the lender nor borrower has access to. On the other hand, the borrower is charged an interest rate between 8 to 16 percent. “Customers can get instant loans of up to $2 million in 45 different fiat currencies within 24 hours,” he added.
Several other homes across the world are also being offered in exchange for Bitcoin. BTCNN on March 12 informed that Antalya, a real estate company had sold nine homes in Turkey for Bitcoin. On March 14, Changpeng Zhao, Binance’s CEO pointed out a home in Northern Australia that was being sold for Bitcoin and Binance Coin.