One of the main issues with bitcoin from a mainstream adoption perspective is price volatility, but a man in California recently benefited from short-term bitcoin price volatility in a major way.
In a recent interview with Bloomberg Markets, Bitpay CCO Sonny Singh told the story of how the bitcoin payment processor helped a man purchase a house with bitcoin and how this individual unintentionally made $1 million on the exchange from bitcoin to U.S. dollars.
Someone Wants to Buy a House With Bitcoin
“We got approached last month by a real estate developer,” Singh told Bloomberg Markets. “He had an offer to buy a house, and the purchaser wanted to pay in bitcoin. And they weren’t really sure what that was, so they contacted us.”
Singh noted that Bitpay has helped facilitate these sorts of transactions several times over the past few years. “We walked him through how it works and the process,” said Singh.
The purchase price of the home in question was roughly $4 million.
Accidentally Making $1 Million
Singh went on to explain that the bitcoin price was at $750 when the transaction to purchase the house was initiated. By the end of the transaction, the bitcoin price was $1000. “So the buyer actually ended up making about 25 percent in the currency exchange rate, essentially, in the appreciation,” said Singh.
According to the numbers provided by Singh, the buyer of the home was left with an extra $1.3 million after the purchase of the home.
“With that extra money, he went and bought a Lamborghini at Newport Beach, Orange County, which also accepts bitcoin with Bitpay,” added Singh. “He got a house for pretty much 25 percent cheaper, as well as a free Lamborghini essentially.”
Is Bitcoin Just for Wealthy Americans?
After Singh told this story, Bloomberg Markets co-host Carol Massar stated, “This is why more people are going to hate wealthy Americans.”
Massar was pointing to the fact that the home buyer was able to make over a million dollars in a day due to nothing more than dumb luck.
When this point was brought up, Singh was also asked if bitcoin will essentially just be a tool for the wealthy in situations like this. Singh disagreed with that notion, pointing out multiple use cases for the digital bearer asset, such as B2B payments or money transfers between China and Korea with extremely low fees.
Kyle Torpey is a freelance writer and researcher who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, NASDAQ, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.