If you’ve watched the news lately, or picked up a paper, chances are you’ll have come across the term ‘Bitcoin’. Even more specifically, a homeowner in south London, Peckham, put their house on the market earlier this year with an asking price of £1.65 million – OR offers in excess of 500 Bitcoin with more properties coming on the market globally with a price in Bitcoin.
So what is Bitcoin and why is it relevant to the property market?
Bitcoin – what is it?
If you invested in Bitcoin at its beginnings, you are a millionaire by now most likely. A type of digital currency, first created in 2009, Bitcoin mainly exists online – and is free from any government control/regulation.
The technology is essentially a blockchain, a financial ledger, maintained by a network of computers which tracks any asset on the chain’s movement – without the need for a central regulator.
What’s been happening with the currency?
To ensure the digital currency maintains value, a maximum of 21 million Bitcoin can be created – which means values can rapidly change depending on the demand at any given time. With around 3600 Bitcoins reportedly being created each day – and a total of around 16.5 million currently in circulation – the currency’s value has been fluctuating in recent times.
As reported by the BBC recently, Bitcoin has begun trading on a major exchange for the first time; the currency price rose past $10,000, reached a high of $18,000 and then settled at $16,000 – but it can fluctuate day to day depending on supply and demand.
Thisismoney reported on the volatility of the digital currency, claiming that Bitcoin has risen in value by 180% in just five months to the start of 2017.
How has it affected the property market?
As the digital currency has become more prominent, with demand increasing – and therefore pushing up its value, some of the first homeowners have begun accepting the digital currency as opposed to traditional currency when selling their home.
One aspect to remember is that even if the transaction is agreed in Bitcoin, stamp duty would still have to be paid in Sterling.
While Bitcoin remains a niche, digital currency, its rise in value, as well as its appearance as an alternative currency for houses on the property market, it is not yet clear what, if any, impact the currency could have on the way that houses are bought and sold in the future.
Clyde Property is a leading independent, multiple award winning estate and letting agent with 30 years’ experience in selling and letting property in Scotland. Just call your local Clyde Property branch today, for friendly, impartial advice on finding your next dream home.