Hotel mogul Richard Hilton, chairman of Hilton & Hyland and the father of American celebrity Paris Hilton, is auctioning the Palazzetto Roman mansion on 28 June 2018 with a reserve price of EUR 38 million (USD 44 million) on the blockchain-based real-estate website Propy. This will be the largest blockchain-based auction in history, and also potentially the largest cryptocurrency real estate purchase in history.
The Palazzetto is colossal at 17,363 square feet, including 11 bedrooms and 15 bathrooms. It has been called the most iconic mansion in all of Rome. This would definitely be the largest piece of real-estate purchased with cryptocurrency in history, if indeed purchased with cryptocurrency. Propy allows bids with US dollar as well, so it could possibly be sold for fiat in the end. Regardless, it will be historic since it is the largest blockchain-based auction in history.
If someone were to buy the Palazzetto with cryptocurrency it would cost over BTC 6,500 at the expected market rate, not bad considering that the first purchase with Bitcoin was a couple of large pizzas for BTC 10,000. So for less than the cost of the Bitcoin pizza, someone can buy an iconic mansion in Rome, which is evidence of how much Bitcoin’s value has skyrocketed since 2010. Of course, this is an auction so the exact price of sale is yet to be determined.
The most expensive piece of real-estate sold for cryptocurrency before this was a 7-bedroom Miami mansion that was purchased for BTC 455, worth USD 6 million at the time. Twenty homes have been sold for cryptocurrency in the past year alone and more are expected this year, perhaps the beginning of a trend where cryptocurrency becomes an accepted mechanism for real estate transactions.
Market volatility is one thing hindering Bitcoin and cryptocurrency from being used for real-estate deals. The price of Bitcoin often changes 5-10% in a single day which could cause quite a bit of stress for buyers and sellers. Platforms like BitPay which instantly convert cryptocurrency to fiat can help minimize risk, but these sort of platforms come with heavy fees for large deals like real-estate. Regardless, the Palazzetto auction proves that using cryptocurrency for large real estate transactions is feasible.
Richard Hilton said, “The auction shows real estate’s growing trust in blockchain and provides crypto investors an opportunity to diversify and solidify their portfolio with a trophy asset.”
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