China's Crypto Millionaires Are Using Bitcoin to Buy Real Estate Abroad

Guo Hongcai, a beef salesman turned early bitcoin adopter from China's Shanxi province, is one of many freshly minted millionaires funneling parts of their wealth out of the country by purchasing real estate abroad. In April, Hongcai sold 500 bitcoin in the U.S. then used that money to buy a 100,000-square-foot mansion in Los Gatos, a 90-minute drive from San Francisco, California.

"It's very normal to sell bitcoin in the U.S. After selling bitcoin, you can just buy anything you want," he told CoinDesk.

As Chinese regulators clamp down on industry business on the mainland, crypto millionaires are turning to foreign real estate markets to diversify their holdings.

The founders of one U.S. crypto real estate startup, who spoke on condition of anonymity, told CoinDesk roughly one-third of their prospective users hail from Asia, figures which include Chinese investors seeking tokenized property rights through Hong Kong securities brokers.

According to the South China Morning Post, real estate purchased in Hong Kong doesn't require the same taxes and documentation as other financial assets held abroad. Chinese investment in foreign real estate, often through Hong Kong brokers, has been rising for years.

"The requests we have from them start at $50,000 or $100,000 up to, the latest one was $3 to $4 million for Silicon Valley," Natalia Karayaneva, CEO of Propy, another crypto-powered real estate marketplace, told CoinDesk.

According to CEO Roy Dekel at SetSchedule, a California-based startup helping licensed real estate agents connect with buyers and homeowners, it's more common for Chinese bitcoin veterans to convert cryptocurrency into cash than to buy property directly with it.

"Historically, real estate investors from China are very active abroad because their own property market is going crazy."

In 2017, Europeans used bitcoin to buy luxury apartments in Dubai's Aston Crypto Plaza, a project spearheaded by British Baroness Michelle Mone.

Wherever it's taking place it has become increasingly clear that crypto wealth could have a real impact on global real estate patterns.