By CANDACE JACKSON CONNECT
Aug. 8, 2014 5:56 p.m. ET
A site in Truckee, Calif., was recently bought with $1.6 million in bitcoins. The buyer plans to build a home. Martis Camp
A Lake Tahoe property sold Thursday for $1.6 million—in bitcoins.
The property is one of just a handful of residential real estate transactions in months that have used virtual currency—and potentially a record in terms of price. The price in bitcoins was 2,739.
The 1.4-acre acre home site has views of the Pacific Crest, a surrounding mountain range. It is located in Martis Camp, a private luxury recreational resort in Truckee, Calif. The 2,177-acre resort, near Lake Tahoe’s north shore, has a Tom Fazio golf course, a 44-seat movie theater and an “aerial adventure park” with rope courses and a zip line.
Brian Hull, Martis Camp’s director of sales, said the buyer was a “Silicon Valley entrepreneur,” but declined to disclose his name. He said the buyer purchased the land through a trust, and plans to build a home on the site.
The idea to pay for the Tahoe property with bitcoins came from the buyer, said Mr. Hull. “When we originally heard the idea of bitcoin, everybody had a little pause,” he said. “We weren’t educated at how the transaction would go.”
The digital currency was introduced in 2009 and isn’t backed by a central bank or government. It can be created by a computer process known as “mining” and traded online through unregulated Internet exchanges. The value of bitcoins, which began at just pennies, has fluctuated over the past few years. The price of a bitcoin topped $1,100 in late 2013, but is now around $590 on the CoinDesk Bitcoin Index and can shift significantly throughout the day.
BitPay, an online-merchant processor that operates similarly to PayPal or Worldpay, handled the Tahoe transaction. Stephanie Wargo, BitPay’s vice president of marketing, said about 85% of the site’s merchants are online retailers. Teslas and Lamborghinis have also been purchased with bitcoins through the site.
To transfer property using bitcoins on BitPay, the seller creates an invoice for the price of the property, either in bitcoin or U.S. dollars, as BitPay can pay out in either currency. The bitcoin exchange rate is guaranteed for 15 minutes after the invoice is created, during which the purchaser must complete payment. If the payment isn’t completed within the allotted time, the exchange rate is recalculated.
In March, an anonymous buyer paid 800 bitcoins, or more than $500,000, for a two-bedroom luxury villa in Bali. In May, a home in suburban Kansas City sold for about $500,000 in bitcoins through BitPay. BitPay says the Lake Tahoe home site is the most expensive property transaction they’ve handled far, though not their largest purchase in general.
Several sellers have tried listing their properties in bitcoins, including a Las Vegas real-estate developer who asked $7.85 million for his 25,000-square-foot home. He has since taken the property off the market, according to his listing agent. BitPremier, a website that sells luxury items in exchange for bitcoins has listings for homes, including one in Naples, Fla., for $969,000 (1,643.373 bitcoins) and a 9,845-square-foot house in the Bighorn Golf Club in Palm Desert, Calif., for $7.45 million (12,627.119 bitcoins).
“As far as I know, this would definitely be a record breaker” for a publicly disclosed property sale using bitcoins, said Alan Silbert, CEO of BitPremier, which wasn’t involved in this deal. The previous record was likely the villa in Bali.
Mr. Hull, of Martis Camp, said the company is now open to using bitcoin for future sales. “We’re in the business of dealing with predominantly the Bay Area,” he said. “A lot of our buyer base is in the tech sector, and there are a lot of people who have bitcoin holdings.”
Write to Candace Jackson at firstname.lastname@example.org