BitPay is increasingly becoming an established name in the real estate industry, with the Grove Resort & Water Park complex in Orlando, Florida, the latest firm to accept bitcoin payments for their luxury condo residences, effective from August 6.
In 2017, BitPay processed approximately $20m in real estate transactions. However, the figure dropped to about $6 million in 2018 following the bottoming out of the crypto market, according to BitPay’s chief commercial officer, Sonny Singh.
And in just the first two quarters of 2019, the bitcoin service provider says it has already processed more than $5m in real estate payments.
Singh said the company is expecting to double its real estate business year after year, having processed $2.7m in 2018 in only direct real estate transactions with “around twice as much via escrow companies and law firms acting as escrows.”
In addition to acting as a payment processor for home buyers, BitPay remains the largest processor of bitcoin in the world with around $1b in yearly business. The company exchanges the cryptocurrency into US dollars and channels the funds to an escrow agent on behalf of the buyer.
Singh said BitPay made its first real-estate transaction through California-based real estate agent Piper Moretti around 2015. Since then, the firm has processed millions in real estate transactions for organizations and individuals, with 2019 currently standing as the best year to date.
The average price of a home purchased via the exchange is about $1m, according to Singh. “These are not $30,000 houses,” he said.
The firm has perpetual relationships with multiple developers as well as real estate agents such as New York-based Magnum Real Estate and JetRE.
BitPay also processes real estate payments in some of the world’s most luxurious housing markets, including Dubai.
Around 79% of the company’s real estate transactions happened overseas, though 34% of the dollar value accrued from domestic U.S buyers.
Grove Resort condos go for anywhere from $330,000 to $595,000 for a property five minutes from Disney World.
In the last few months, there has been an increase in potential clients from Turkey, China and Brazil inquiring about bitcoin purchases, according to a director David D’Ambrosio, a director at the resort.
“It was easy to determine the potential market available,” said D’Ambrosio, suggesting that “bitcoin hodlers” were seeking a way to expand their portfolios.
He said the resort contacted BitPay because the company “has done a couple of billion in transactions, and at least a few million in real estate just in Florida and Southeast U.S.”
BitPay charges a 1% processing fee and settles in seconds. In comparison, bank wire transactions incur a 5% processing fee and may take several days to clear, according to Singh.
D’Ambrosio added, depending on conditions, the resort “as developers could help contribute towards that [processing fee], we could help pay for the title fee.”
Grove Resort presently only accepts bitcoin, but may allow other currencies in the future.