A real estate buyer in California profited nearly $1.3 mln after purchasing $4 mln worth of Bitcoin with an intent to purchase a house in California.
Earlier this month, BitPay chief commercial officer (CCO) Sonny Singh was approached by a real estate buyer based in California who wished to purchase a $4 mln house solely using Bitcoin.
Singh and the BitPay team, which provides a wide range of Bitcoin services assisted the buyer and the real estate developer in coming to terms with the final settlement. At last, a $4 mln price tag was agreed upon to be fully paid in Bitcoin.
The buyer went on to purchase millions of dollars worth of Bitcoin to initiate the transaction. At the time, Bitcoin was worth around $750 in the global Bitcoin exchange market. Once the buyer secured $4 mln worth of Bitcoin, he initiated the transaction and sent the payment to the real estate developer to close the deal.
25 percent cheaper
When the buyer initiated the final payment and sent the transaction to the real estate developer, Bitcoin drastically increased in value, surpassing the $1,000 mark to reach its all-time high market cap and price at $1,160.
In the end, the buyer profited $1.3 mln in the currency exchange rate, as Bitcoin rapidly rose in value due to economic uncertainty in China and the United States, triggered by the devaluation of yuan and increase in interest rates by the Federal Reserve.
“The buyer actually ended up making about 25 percent in the currency exchange rate, essentially, in the appreciation. He got a house for pretty much 25 percent cheaper.”
Bitcoin’s safe haven
Over the past two years, Bitcoin has served the global financial industry as a safe haven asset and wealth protection tool against financial instability. While assets, bonds, stocks, and reserve currencies declined in value, the price of Bitcoin continuously surged due to the rising demand for the digital currency in major markets including China and the United States.
Since the Indian government began to impose harsh regulations on gold, restricting its import and export and trading, Bitcoin has been perceived as digital gold or a virtual safe haven asset for investors and traders.
These unique and rare cases prove the efficiency and practicality of Bitcoin as a store of value and safe haven asset, which can be used to initiate large-scale transactions at ease and as a hedge against financial instability and economic uncertainty.