Crypto-based purchases in Dubai’s real estate market - amidst troubled times in the market

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Staff Writer,TLR

Updated July 14, 2023


Over the past 8 months, Bitcoin has fallen by nearly 57% year-to-date. It is safe to say that cryptocurrency shareholders currently have all-time low confidence in the market.

This class of assets exists due to disposable income, which has been steadily diminishing as a result of several factors – the post-pandemic economic effects, the Russian-Ukraine war, and now inflation.

It is unreasonable and possibly unprofitable for investors to keep holding on to crypto when it might lead to realized losses for them. Very few, and usually only the ultra-rich, can afford to wait till the market goes back to a successful curve. Thus, crypto investors who are expecting a downward trend in crypto will likely look to convert this extremely erratic asset into something which is quite the opposite – safe, stable, and secure: Property ownership in Dubai. 

Dubai is already a pioneer in the real estate industry, and thus it comes as no surprise that despite the downward trend in the crypto market, crypto-based transactions and inquiries related to property purchases have been on the rise recently. 

The reason to choose Dubai real estate market

Dubai far surpasses the likes of other excellent property investment opportunities available in countries such as the US, Australia, India, Singapore, Canada, and the UK. It is the optimum location for high-net-worth crypto traders, and a leading reason for that is the stellar advancements in technology and infrastructure.  

Real estate is emerging as the most popular choice among the industries where cryptocurrency is used, and Dubai is a well-established hotspot when it comes to the real estate market.

As a commercial and tourist hub, coupled with a reliable legal framework which supports stakeholders, it boasts a strong history and a bright future when it comes to this industry.

This has been further exacerbated by the establishment of the Virtual Assets Regulatory Authority, which will serve as a landmark in the virtual assets industry by providing regulation and supervision of virtual assets services.

This act establishes Dubai as a leading figure in the crypto hub as it opens doors to business growth through virtual assets, while also maintaining the balance by overseeing the concerns of consumer protection and prevention of financial crime and governance. 

This recent development has made Dubai an appealing location for crypto exchanges, and it is looked at favourably by investors who are looking for great returns in not only the material world but also the digital one.

Although cryptocurrency is not considered a legal tender in the Emirates as of yet, it is still accepted as a method of trading in several areas. Real estate is one of them, and the most popular choice as well. 

 Dubai real estate market  & Crypto

When purchasing luxury real estate, the crypto-rich often use cryptocurrency exclusively or divide the cost between cash and crypto. Over 40 million Americans own Bitcoin and seek uninterrupted and safe asset options to bring variety to their crypto portfolio.

Crypto provides a unique characteristic that allows users to speedily and safely make blockchain-based transactions.

This method forgoes the waiting period required in traditional bank transfers. However, for crypto to gain traction and popularity, there is still some acceptance and time needed.

Due to the benefits of using digital transactions as opposed to traditional ones, they are becoming more of a popular choice in the global property market.

Investors no longer need to deal with the hassles of currency conversions or transferring money to foreign banks. Advancement in technology has allowed investors to buy real estate in just a matter of a few weeks.

The transparency that comes with cryptocurrency such as Bitcoin also allows organizations to easily verify the validity of property investors who want to buy via this currency.

A way to avoid the risk of unpredictability in price, investors can set the price in fiat currency at Coinsfera when buying property via crypto, and then convert the money back to Bitcoin. They can then convert it back to fiat currency once the transaction is done. 

Another reason why crypto makes for a cautious choice in real estate investment is that, unlike traditional fiat money, the majority of cryptocurrencies have a finite supply which is dictated by a framework which works according to the elliptic curve.

This means that inflation cannot cause the governing body or entity from losing value. Thus, if one is looking for a long-term and dependable store of value, crypto is the way to go. 

Further, owing to the cryptographic structure, governing bodies or entities do not have the authority to access or tax cryptocurrencies if they don’t have the owner’s consent.

Therefore, those that are worried about the adverse effects of hyper-inflationary occurrences or times of economic crises, will find crypto attractive. Bitcoin, in specific, is deflated and resistant to censorship, which is why it is widely regarded as digital gold and has garnered much attention.

 The future of crypto in this market

The biggest roadblock is that most developers aren’t yet familiar with how crypto can change the property investment landscape. Crypto is still an emerging asset class and continues to compete with the predominant traditional methods of trading.

This financial framework is still establishing its foundation, and as it does so, stakeholders in the industry will discover how crypto can be effectively utilized in the sale and purchase of the property. 

As this asset class grows, there will be overarching implications about how far this technological real estate revolution can continue to develop, and about all the stakeholders such as developers, governance, investors, etc. that are affiliated with crypto. 

The future and acceptance of crypto in the real estate business rely on convenience, strengthened security, and an expanded marketplace.

The effects of crypto payments as a fast-growing alternative will affect property transactions in exciting ways which both buyers and sellers should keep an eye out for. 

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