For better or worse, crypto has made its mark on the city. (Skyline - Douglas Elliman; Bitcoin - Pixabay, Gordon Johnson)
In the early days of cryptocurrency ("crypto"), some thought it was a passing fad that wouldn’t make it into the next decade. However, the sheer scale of the crypto market keeps it from fading away any time soon. All currently extant Bitcoins are worth about $500 billion, and that only refers to one cryptocurrency. Ethereum, Tether, and others bring us to a total market cap of over $1 trillion.
Moreover, New York is the center of the financial universe, which is extending to crypto as well. Cipher Mining has leased space at One Vanderbilt, Coinbase sublet space in Hudson Yards, and Chainalysis signed a lease for about 77,000 square feet in “Silicon Alley,” as a stretch of the Flatiron District has become known for its tech tenants. That is to name but a few; last May, an office broker told The New York Times, “We’ve gone from essentially no companies focusing on this in 2015 to about 835,000 square feet now.”
Moreover, New York is the center of the financial universe, which is extending to crypto as well. Cipher Mining has leased space at One Vanderbilt, Coinbase sublet space in Hudson Yards, and Chainalysis signed a lease for about 77,000 square feet in “Silicon Alley,” as a stretch of the Flatiron District has become known for its tech tenants. That is to name but a few; last May, an office broker told The New York Times, “We’ve gone from essentially no companies focusing on this in 2015 to about 835,000 square feet now.”
However, the days of crypto’s all-time highs seem to be behind us. Earlier this year, the price of a Bitcoin plummeted from $45,000 to $15,000, leading to equal measures shock and schadenfreude. Funding for crypto and blockchain startups has dropped to $190 million in Q1 2023 from $1.2 billion in Q1 2022. Moreover, between the aforementioned wild fluctuations, the bankruptcy of trading platform FTX, and the arrest of “crypto king” Sam Bankman-Fried, New York is seeking stronger regulation in the hopes of keeping it under tighter control.
The seller of this Midtown West condo is willing to accept Bitcoin or Ethereum (The Parc Vendome, #7G - Compass)
Crypto’s impact on the real estate market
With the rise in crypto office space, crypto millionaires are eager to make a permanent home or buy a pied-a-terre in New York. However, while they may have the funds to buy in some of the city’s more prestigious (and expensive!) co-ops, which would thus establish them among the magnates who have historically made their homes there, entrance here is not guaranteed. Some co-op boards have set up guidelines for handling crypto, but others might be put off by the wildly fluctuating crypto market; after all, they want to be certain that their shareholders can afford to pay their maintenance. For those reasons, condos might be a better fit.In any building type, it isn’t impossible to buy an apartment in crypto. New York’s first real estate transaction using crypto took place in March 2018; nearly three years later, a Bushwick boutique condominium made headlines for its willingness to accept Bitcoin or Ethereum as forms of payment. It has not yet emerged as a widespread practice, but some individual listings post dollar prices but state that the seller will accept crypto. In such cases, a third-party service would accept the payment, convert it to dollars, and give the seller the resulting cash.
It is important to note that while these buyers may have made their money in crypto, they may not necessarily be looking to buy with this currency. If anything, they may be looking to New York City real estate as a safe investment in case the crypto market goes south again.
It is important to note that while these buyers may have made their money in crypto, they may not necessarily be looking to buy with this currency. If anything, they may be looking to New York City real estate as a safe investment in case the crypto market goes south again.
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