A lot of investors and real estate developers tried to take advantage of the crypto boom as new crypto millionaires were looking at real-life property in order to enjoy portfolio diversification.
These new-age millionaires purchased expensive homes across the country including Miami- home to FTX arena, Dallas, Los Angeles, and New York.
Unfortunately, all of this came crashing down recently after the collapse of Sam Bankman-Fried’s FTX, which was the second-largest cryptocurrency exchange in the world. It is estimated that the number of FTX creditors stands at $1 million and it will also cause a ripple effect across the crypto industry with exchanges, brokerages, and other crypto startups being highly vulnerable to the collapse.
The effects will be felt across many sectors and include the commercial real estate industry. Let us take a look at the impact of crypto millionaires and buyers on the commercial real estate market.
Market Flooded with Pre-Construction Real-Estate Purchased with FTX Scam Coin
There are a lot of buyers who have invested in pre-construction properties through the use of FTX coins. Due to the current collapse, it has become unclear what the builders are going to do but the market will be flooded with several deals on the pre-construction real estate that was earlier bought with FTX scam coins.
Real estate owners are experiencing a very dramatic slowdown after the FTX filed for bankruptcy and crypto buyers have already started pulling back on their spending. This means there is no certainty on what will happen to those buyers who had used FTX to purchase pre-construction condos using cryptocurrency.
But everything’s not lost yet. There could be good news for investors. Since the market will be flooded with underwater contracts, there will be many lucrative commercial real estate investments that could take place in the coming year.
Crypto Millionaire Properties Are On the Commercial Real-Estate Market
Not many are aware of a mysterious crypto investor who spent an amount equivalent of $22.5 million on a Surfside penthouse last year and is now keen to cash out, even at the cost of losing money. The property had been listed for $28 million but it returned to the market for $19.9 million in November.
Several Los Angeles brokers have received calls from sellers in the $15 million to $45 million range who were stuck due to the crypto meltdown. With developers moving away from FTX and crypto buyer pools, even the brokers who have been working in the space for many years believe that crypto holders will eventually make their way back into the real estate sector.
The FTX scam could benefit the CRE market and this could be an opportunity to pick the best properties at great rates.
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