A commercial building in New York has been put up for sale in the form of NFT. Unfortunately, the cryptocurrency crash has chipped away at the value of the building.
At the end of May 2022, Okada & Co, a real estate company in Manhattan, put a commercial building up for sale in the form of a non-fungible token (NFT). The building was traded on OpenSea, one of the industry’s leading NFT selling platforms, for the sum of $29 million in Ether (ETH).
Unfortunately for Chris Okada, the CEO of the real estate company, the cryptocurrency market crashed within days of the listing. Since the beginning of June, the price of Bitcoin has been in freefall and risks falling below $20,000. The queen of digital currencies has taken all other cryptocurrencies with her.
Fall in the price of Ether (ETH)
This is the case of Ether. After a breakthrough above $4500 in 2021, Ether has gradually unscrewed. Cryptocurrency is now living around 1100 dollarsa first since January 2021.
Following the drop in the price of Ether, the Okada & Co building lost just over 40% of its value. Offers at the price of 15,000 ETH, the building is now worth just $17 million on OpenSea. Asked by CoinDesk, a media specializing in cryptocurrencies, Chris Okada announced a price readjustment.
“We will re-list the sale at $29.5 million”, announces Chris Okada. He specifies that he could abandon the idea of selling the building for Ether due to the extreme volatility of the currency in recent weeks. To protect itself from a further decline, the company could turn to USDC, one of the main stablecoins in the ecosystem. The value of the token is indexed to the US dollar, which protects investors from the vagaries of the market. “If we go for ETH, it will be closer to 26,500 ETH”adds the CEO, or approximately 29 million dollars.
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Real estate turns to crypto and NFTs
For Chris Odaka, it is above all a way ofattract cryptocurrency billionaires. “There are crypto-billionaires and crypto-millionaires who have no other use for their cryptocurrency than to have it in their wallet”, explains the leader. After winning the token, the buyer will have to follow a classic regulatory process to obtain ownership from the US authorities.
Despite the collapse of the NFT market, many real estate players continue to bet on non-fungible tokens to sell their properties. In February, a house in Florida, in Tampa Bay, was also sold in the form of NFT. The asset traded for 210 ETH, or $650,000 at the time of the sale.
In some cases, buildings are directly sold against cryptocurrencies without being converted to NFT. In Venezuela, a young investor bought an apartment for $12,000 in USDT, another stablecoin, in August 2021. Some luxury real estate complexes also accept payments in crypto-assets. This is the case of the Arte Surfside, an upscale complex located in Miami.