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Crypto property investment - is it worth the risk?

Cryptocurrencies such as Bitcoin and Ethereum have become increasingly popular among young investors, despite being famously volatile. But, at present, buying a property with crypto remains very rare and niche - not to mention highly difficult.

With a market that continues to be unrecognised by the Financial Conduct Authority (FCA), and the Bank of England warning that cryptocurrency could be worthless, could this ever change? Will property investment via cryptocurrency ever become mainstream, despite the risks attached and the greater risk of scams and fraud?

Gilly Kennedy-Smith, partner in Mourant’s International Trust & Private Client practice in Guernsey, said there has been a resurgence of interest in not just owning cryptocurrencies but also investing in the mechanisms behind it. 


"As with any investment, if you don't understand what you are doing, you may lose your money, so what are you willing to invest and how much research are you willing to do? Most of our clients do extensive research before they invest, to ensure they understand smart contracts, blockchain and how the processes work."

She added: "One thing that is often forgotten is how they should protect that investment and how they can ensure it is passed on to family members on their death. How they achieve this depends on how they invest, the level of investment and how they view that investment.  Protections can be factored in either way and should be considered earlier on than they currently are, as this is not just a standard investment. You need to understand what you are getting into."

Meanwhile, property expert Jonathan Rolande commented: "I suppose my main question to someone looking to buy a property with crypto, or to sell one and accept it, would be a simple: 'why?' It is very easy to convert crypto back to the currency of the country the property is in and, of course, currency is more stable than crypto." 

"Bitcoin is down nearly 40% in 3 months (although by the time you read this, that will have changed!). A buyer wishing to use it should arouse suspicion. It was, and often still is the go-to payment method for criminals. Sellers and their agents have a legal duty (and a moral one if you ask me) to check on the source of funds being used. By it’s very nature that’s impossible to do."

He added: "Sellers may offer to accept it as a way of attracting more potential buyers – right now it adds a certain newsworthiness and could generate addition publicity for the home. Sellers accepting is slightly less problematical, they can easily be identified and likely bought the property with normal, traceable funds. Their problem will come when a seller arrives and might be uncheckable."

Rolande went on: "Like many new things, there will for now be some niche transactions in cosmopolitan areas using Crypto, but I can’t see it becoming widespread for some time yet – at least not whilst we still have faith in our home-grown currency."

That said, recent trends could increase its chances of becoming mainstream.

"According to Charles Schwab UK, half of UK investors are already trading it. So it’s mainstream use may be inevitable as younger, more tech-minded buyers come through the ranks. But my question is still this. Why?"

Poll: Will investing in property via crypto ever become mainstream?


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    "A buyer wishing to use it should arouse suspicion. It was, and often still is the go-to payment method for criminals" Ha, criminals have never used fiat currency have they??


    What kind of idiotic conclusion is that? That's like saying it's ok to leave your door open because burglars have also broken through locks.


    The criminals are all sat in the board rooms of Investment Banks, Accountancy Firms, Lawyers offices and Parliament! Remember what stoked Crypto? 2008?


    @Martin Greenwood

    Haha.. hilarious. What has stoked crypto is speculation and scamming. In other words, greed. Exactly what you're railing against the 'criminals' for.

    Oh wait I forgot, it's all about the noble principle of decentralisation right?

    Yeah right, that's why there are currently over 5000 cryptos. If it was about decentralisation then bitcoin would have been all there ever was. Instead every dipstick who ever coded is releasing their own in an attempt to pump and dump.

    Crypto, and the way the crypto market generally behaves, is INFINITELY more immoral and bad for society than anything the financial system ever did.

    You my friend, are sorely in need of an education.

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    Technically, what is new? Gold, diamonds, and all sorts of commodities have been used for payments. It really doesn't matter. The buyer can go on to sell in yet another commodity. Its bartering of course.

    The problem comes when a country needs to have an accountable value system. That's a deliberately vague term. That system has to have an exact value that persists over long periods. This is where bit coin goes into the realms of Disney fantasy - as does any other barter system. Disney output is always very high quality but it is priced at what you can afford to pay. Stop there.

    Governments have long used the idea of a fiat currency which they maintain at a certain value. That used to be based on gold but now it is based on trust (laugh) and taxation yield. The latter being as reliable as the wind. What is the value of bitcoin based on? Basically, the cost of today's menu. It is not linked to a fiat currency. I guess that is fine for day to day cash flow but if you are putting money under the bed you will never know what you will be able to retrieve from there.

    I don't have an answer but how could you make a legal claim to recover what you have lost through fraud or fire unless your asset is related to a fiat currency?
    Stop there, I am going beyond my pay grade.


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