Brock Pierce Becomes First Buyer of Real Estate to Use Bitcoin for Their Purchase
After months of seeing low prices, Bitcoin suddenly jumped over the last few days above the $5,000 price level. With this price hike, the whole industry has been talking about what this could mean for the future of the crypto assets. Now, the biggest crypto lender in the world has made history as they became the broker for a $1.2 million Bitcoin real estate purchase for actor Brock Pierce, as reported by FOX Business.
In November, the actor, who has gotten involved in the crypto game over the last few years, presently keeps about 95% of his total worth in cryptocurrencies. With 3 million of his Bitcoin in hand, he took himself to Amsterdam to purchase a $1.2 million renovated home. The co-founder and managing partner for NEXO, Antoni Trenchev, spoke with FOX Business, confirming that the whole loan was backed by Bitcoin, adding that this is their “first-ever crypto-backed mortgage.”
Trenchev said that most crypto proponents are holding on to their assets under the belief that that the crypto world will take off, which appeared to be what Peirce was doing. However, when the need for fiat cash arises emergently, and there’s Bitcoin available to help, it would almost be foolish to hold on at that point.
The co-founder explained that NEXO uses Bitcoin and other digital currencies as a way to secure collateral. In turn, the company provides a fiat payout for the value, acting as a custodian. However, Trenchev is very clear about one specific fact – “Neither the client nor us have access to the coins.” Still, customers are able to have instant access to anywhere below $2 million at a time. The lender provides access to 45 different fiat currencies around the world.
The customers are charged interest rates, which range from 8% to 16%, much in the same way that a credit card or loan would. Considering the way that cryptocurrency continues to be wavering and uncertain, there are many customers that are required to use double the amount of cryptocurrency that their loan would require as a way to protect the loan. Essentially, Trenchev says that the company will “lend you like 50 cents on the dollar.”
Even with these high rates, Pierce believes that opportunities like this are the combination of the “old world of traditional finance and the brand-new frontier that blockchain now enables.” He continued, saying that the idea of borrowing from assets improves the options for investors, and it “aligns with [his] philosophy” in that it could create a massive market.
Before the launch of Nexo last year, the company managed to bring in $52 million. So far, the lender has over 170,000 clients around the world.