FEBRUARY 6, 2022 | Issue 01
WHY A WEEKLY EMAIL ABOUT CRYPTO?
Imagine you are a real estate agent in 1996. You’ve been hearing about this new thing called the Internet and the World Wide Web.
You don't pay much attention to the constant drip of stories, but eventually you realize it isn't going away and you should understand what the Internet is and how it's relevant to your world.
You decide to learn more by subscribing to a newsletter which was mailed to you. Fast forward 26 years and we are on the cusp of another revolution. You've been hearing about cryptocurrency, bitcoin, NFTs, crypto mining, and even virtual real estate. What is all this stuff and how will it change your life as an agent? You want to gain a basic understanding, but you don't know where to begin and how to keep up. I felt the same way. After the well-known digital artist Michael Winkellmann, known as Beeple, sold a digital picture in an NFT (non-fungible token) for $69 million at a Christie’s auction on March 11, 2021, I was intrigued and determined to learn more.
I had a selfish reason for wanting to learn more about NFTs.
My son, Matt Hopen, was studying art at Pratt Institute and I wondered how the financial opportunities for artists would be changing.
Educating myself about NFTs led me to blockchain, cryptocurrency, and unusual concepts that stretched my mind – stable coins, DeFi (decentralized finance), DAOs (decentralized autonomous organizations), and the metaverse. The more I learned, the more I realized how little I knew.
Eventually, the conceptual puzzle pieces started to form an image. Not a static picture, but a slow moving video. The crypto space is evolving and it’s difficult keeping current. I stay informed by reviewing numerous sources daily. I'm enthusiastic about sharing what I'm learning with fellow agents who are crypto curious. So grab my hand and let's jump down the crypto rabbit hole......
CRYPTO REAL ESTATE NEWS
First US House to be Auctioned as an NFT
On Tuesday, February 8, 2022, an MLS-listed house in Gulfport, FL will be auctioned as an NFT. The NFT listing was set up by a crypto real estate startup, Propy.
NFTs are non-fungible tokens which are commonly associated with graphic images which wealthy celebrities and speculators buy, sell, and collect.
However, the mechanism for creating NFTs and its utility can also be applied to buying and selling physical items.
The Pinellas County property had an open house yesterday, and the listing agent, Amy Heckler, told me the turnout was tremendous. According to a local TV news story, multiple offers have been received.
However, hopeful buyers who submitted traditional offers through their agent, have to get in line behind the NFT bidders.
The seller will first review NFT auction bids and if none are accepted, the seller will review the offers submitted by agents. There are some restrictions for those bidding for the NFT:
• The buyer must be an individual, not an entity.
• The buyer must pay 100% of the bid, no mortgages allowed.
• Payment must be in cryptocurrency.
The auction winner will receive a digital certificate showing ownership of a corporation, the house is an asset of the corporation.
On Monday, February 7, 2022, details of the property and the NFT bidding process will be released. Before then, I have some initial questions:
1) If no title company is involved in the transaction, how will the buyer know they are getting clear title?
2) If an agent went to the open house and presented a written offer, what will happens if that buyer also bids for the NFT and wins? Is the bidder’s agent the procuring cause and entitled to a commission? If so, who pays the buyer’s commission?
3) If the property is sold at auction, does the listing agent still receive their commission? If so, what is the mechanism for payment?
While there are questions, and most likely unsatisfactory answers, congratulations to the listing agent, seller, and Propy for launching this listing.
Next week, I’ll provide an update on the sale.
CØMPASS Agent Lists House & NFT
When Susan Vanech listed 6 Rockland Pl, Westport, CT, she decided to test the NFT waters.
In addition to listing the property on the local MLS, the agent paid an artist to create a 360-degree moving graphic image of the property and had it “minted” as an NFT on the marketplace Rarible.
I asked Susan how agents have responded to the NFT offering.
She said, “Not a single agent understood. A handful of buyers did. One couple said they have been referring to the the house as the “ ‘NFT House.’"
Susan added, "I enjoy having more to share about the home than the stone counters and hardwood floors!”
CRYPTO NEWS
• The Securities and Exchange Commission (SEC) said that it is delaying its decision whether or not to allow a bitcoin ETF. The application was submitted by Grayscale.
• January was a tough month for crypto markets and the stock market. CoinDesk's Nathaniel Whittemore (NLW) said the megatrend was a shift from "risk-on" to "risk-off." Meaning, investors sold stocks and crypto and shifted to lower risk investments, such as US Treasury Bonds. Venture investment in crypto hit $4.4 billion in January.
• Play-to-earn games allow players to earn money on blockchain-based platforms. Axie Infinity has 3 million daily users. Its popularity grew in the Phillipines in 2021 because proficient players often earned more than the country's minimum wage.
RESOURCES – Books, podcasts, videos, articles
• CoinDesk should be a bookmark for any agent interested in learning about crypto. It covers all the key crypto issues and offer free subscriptions to many newsletters.
INFLUENCERS - People to follow
Vitalik Buterin @VitalikButerin Vitalik wrote a white paper arguing that bitcoin's potential was stifled because it lacked a language for applications. He created Ethereum. Today it has a $354B market cap. Vitalik's net worth is $1.5B per Forbes.
What do you think? Is Crypto News for Realtors helpful and an interesting quick read? Shoot me an email at richard.hopen@compass.com.
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Thanks!