Sofiko is a freelance fintech copywriter at Coinspeaker. With a Bachelor degree in International Business and Economics, Sofiko has been deepening her knowledge of an agile innovative industry primary focusing on the robust blockchain technology and cryptocurrencies. As a bank employee, Sofiko particularly keens on crypto and blockchain integration into the established banking systems.
Bitcoin billionaire Mike Novogratz explains another possible scenario to resurrect the cryptocurrency market, this time the real estate tokenization comes first.
The market of digital assets is shattering and the league of crypto-enthusiast who once predicted skyrocketing soars, now develop new concepts to fight the current plummeting and breath new life into cryptos.
Mike Novogratz is a vivid example of Bitcoin bull who used to give a cheerful keynote to crypto-investors saying that Bitcoin and other cryptos reaching the bottomline is a common thing for the emerging market of digital assets.
Moreover, previously in September, Coinspeaker reported the Novogratz’s statement of $10,000-worth Bitcoin by the end of the year. The year is drawing to a close, but institutional investors still wave away from actively pumping money into cryptocurrency.
However, in his prediction Novogratz have been mentioning the first two quarters of ongoing year, so the time is left. Yet today we saw him dwelling on a new approach to crypto-investing, a real estate tokenization.
The Concept of Real Estate Tokenization
A new trend, Novogratz is so excited about, revolves around tokenization of real estate and the advert of security token offerings (STO).
The concept is rather simple as it applies to any crypto-investment made via token purchase, only in the realm of real estate, tokens stand for a fraction of luxury property that investors can own even for the smallest amount of initial investment.
The concept of tokenization receives enormous feedback because, until today, small and medium investors were unable to participate into the construction of exquisite real estate. Now they and big players have equal opportunities that put them at entirely new investment level.
Novogratz Bets on Tokenized Real Estate
Novogratz considers this emerging trend as a life-saviour for the crypto-industry, when during a conference in Toronto he noted:
“So while it feels like a crappy bear market, and it has been in coins, underneath it there’s all kinds of positive things. There’s positive movement on the technology and there are new technologies coming. There’s positive movement on the institutional adoption of the architecture needed.”
Further the founder of crypto-investment bank Galaxy Digital Capital Management said that several companies had already been tokenizing luxury condos in the high-priced real estate markets of New York and Aspen, Colorado. Novogratz also noted that he believes there will be some more in the near future.
And this point might be true, as there is measurable data to prove it right. According to CNN, in October, a $30 million Manhattan building comprised of 12 upscale condos was tokenized on the Ethereum blockchain. The tokens of diverse value are now available for purchase.
In the meanwhile, top-notch experts in the field of real estate also endorse this trend. The broker who closed the deal on the first piece of poverty represented in the sum of tokens expressed his experience saying:
“With blockchain tokenization, we can remove the unruly pressure of traditional bank financing, which is much healthier for the project and all of the stakeholders. Tokenization is paving the way for a new forefront in real estate development.”
No wonder that Novogratz is so into this robust trend because a large amount of investors and investment platforms are willing to adopt the practice in order to be able to sell off fractions of their shares rather than holding on to them.
Therefore to prepare for the influx of institutional money, Novogratz enhances the team of Galaxy Digital with the Goldman Sachs’ former employee who will be responsible for blockchain advisory-services arm.
Notable that about a month ago, Goldman Sachs together with Novogratz invested a total of $15 million in the Series B funding round for blockchain platform BitGo.