A Bitcoin evangelist who goes by the moniker “Paychecks” paid nearly 18 Bitcoin for a condo, in what appears to be the first cryptocurrency-only real estate transaction in South Florida.
Ivan “Paychecks” Pacheco, who co-founded the cryptocurrency website Bits to Freedom, paid 17.741 Bitcoin, or the equivalent of $275,000, for a two-bedroom unit at 777 Northeast 62nd Street in Miami’s Upper East Side neighborhood, according to brokers Stephan Burke and Carol Cassis. The agents, both of Brown Harris Stevens, represented Pacheco and the seller, Frank Mainade Jr., a drone racer and fellow cryptocurrency enthusiast.
Typically, investors who use the digital currency to buy real estate in the U.S. are converting it to cash, experts said, and no known deals before this have closed involving only Bitcoin. A 2014 land deal in Lake Tahoe claims to be the first purchase involving Bitcoin, but Burke and Cassis said it was completed by transferring the cryptocurrency to cash. In September, a single-family home in Austin also closed using Bitcoin, but the seller had it converted to dollars as well, according to CNBC.
Given Bitcoin’s extreme volatility (see chart below), it’s been tricky to get buyers and sellers on the same page about pricing for Bitcoin-only transactions.
Bitcoin investor Michael Komaransky purchased a mansion in South Miami for $4.6 million in 2014 that way, and he did the same in September when he spent $7.55 million upgrading to a waterfront spec mansion in Coconut Grove.
Pachecho and Mainade found each other online and tried to close the condo deal on their own, Cassis and Burke said, but they ran into complications involving the seller’s mortage, Burke said. Through Burke, himself an investor in and advocate of the currency, they signed a contract and agreed on a price – in dollars – about three weeks ago. The deal closed Dec. 22.
As Bitcoin’s value skyrockets and plummets, planning for its fluctuations is key to closing deals. A week ago, the virtual currency crashed to under $11,000, down from more than $19,000. On Thursday, it was trading at just under $14,000, and on Friday morning, it had exceeded $14,600.
“The reason people want to close so fast is because they don’t want to risk the volatility,” Burke said. “It’s the buyer who hopes it doesn’t go up or down.”