In the last five years, the worldwide use of cryptocurrency to pay for real estate has increased to about $100 million. But, in the last year, this has decreased to nearly nothing because of a significant decline in the cryptocurrency market. For example, Bitcoin, the most widely used cryptocurrency, decreased in value by 60% in the last six months. Bitcoin has been the most popular digital currency for buying properties, many of which were located in New York and Florida.
What is Causing this Crash in Cryptocurrencies?
The market surrounding cryptocurrencies, just like the stock market, is currently tanking because of inflation and fears of a recession. Investors have over-leveraged themselves in the same way homeowners did before the 2008 market crash.
But What Does This Mean for the Real Estate Market?
Hopefully, nothing. While cryptocurrency is a hot commodity in the American investing space, it basically exists within a vacuum. Most of the companies that interact with cryptocurrencies are the crypto platforms themselves and venture capitalists and asset managers who have built businesses around crypto. Because of this, the crash should not spill out into the surrounding markets – including real estate.
The important thing to note, though, is that while the crypto market may not influence the housing market, both of their instabilities are due to the same cause: pushing a massive amount of liquidity into the market in response to COVID-19. Just like the crypto market, the housing market will not be able to continue on this path of soaring prices, rising inflation, and ever-ascending mortgage rates. Many experts agree that a real estate market crash is coming, though it will not be anything like the one in 2008.
Hire A Real Estate Attorney in New York
If you need help understanding the current real estate market or are facing foreclosure, Attorney Melvin Monachan can help. Mr. Monachan has years of experience helping his clients navigate the nuances of acquisition, transition, or foreclosure defense. To learn more, call (347) 389-1682, or contact us online today.