"Buy land, they're not making it anymore." This quote, often misattributed to Mark Twain in the 20th century, has been frequently used as a slogan in the real estate industry. Gravity has given a strong endorsement to this statement, as if humans cannot achieve interstellar travel, land is as "inelastic" as Bitcoin.

In 2025, the crypto wave traveled from Silicon Valley to Wall Street and finally reached Washington. As compliance gradually took place, it quietly began to transform the fundamental structure of the real estate industry. In early July, Christie's International Real Estate officially established a dedicated department for crypto property transactions, becoming the world's first luxury real estate brokerage brand to fully support "pure digital currency payment for real estate purchases" under a corporate name.

And this is just the beginning. From Silicon Valley entrepreneurs to Dubai developers, from Beverly Hills mansions in Los Angeles to rental apartments in Spain, a new batch of real estate transaction platforms centered around blockchain technology and digital assets are emerging, forming an emerging "Crypto Real Estate" track.

Why Crypto Can Drive the Next Wave of the U.S. Real Estate

The value of U.S. real estate nearly approached $50 trillion in 2024, making it one of the world's most substantial asset markets, compared to around $23 trillion in 2014, doubling the asset size in this sector over the past ten years.

U.S. Real Estate Overall Volume, Awealthofcommonsense Analysis Report

In June 2025, the NAR report showed that the median U.S. home price reached $435,300, a 2% year-over-year increase. Housing inventory was about 1.53 million units, with a supply-demand ratio of 4.7 months. High prices and long-term supply shortages have raised barriers, coupled with consistently high mortgage rates (July 2025 30-year fixed-rate average of around 6.75%, compared to about 9% for Bitcoin mortgages), always higher than the annual value appreciation of the property, suppressing transaction volumes. The low liquidity has prompted real estate investors to seek new sources of liquidity.

The high interest rates are not the only issue hindering real estate investors' low liquidity. Over the past five years, the average wealth of property owners has increased by $140,000. However, many families are reluctant to use property for borrowing liquidity while holding real estate assets because their exit paths are generally limited to either selling the entire asset or renting it out. Using property for borrowing does not seem to be a good option at the current rates, and selling in the case of continuously rising prices does not appear to be a better investment decision.

Therefore, in the overall $50 trillion real estate sector, currently around 70% of the equity (approximately $34.98 trillion) is held by property owners, meaning only 30% is backed by debt capital, with the rest being self-financed by homebuyers. For example, a family owns a $500,000 property; although nominally they own this property, if they were to sell it, they would need to deduct the loan share to determine their actual holding. Under a 70% equity scenario, they would have $350,000 equity in this property.

U.S. Real Estate Equity Ownership, Source: Ycharts

However, relying solely on the supply-demand relationship is far from enough. The concept of RWA has been developing for many years but only truly started to take off in the past two years, especially with the steepening slope post-Trump's election in 2025.

Its core is compliance, especially crucial for investors in illiquid assets like real estate. William Pulte, the new director of FHFA, ordered Fannie Mae and Freddie Mac in March 2025 to draw up plans to allow encrypted assets to be included as reserve assets when assessing single-family mortgage risks, without the need to convert them into dollars first. This policy encourages banks to view cryptocurrency as an eligible savings asset, thereby expanding the borrower base.

In July 2025, Trump signed the GENIUS Act and promoted the CLARITY Act. The GENIUS Act first recognized stablecoins as legal digital currencies, requiring stablecoins to be fully reserved at a 1:1 ratio with assets such as the U.S. dollar or short-term government bonds and subjected to third-party audits. The CLARITY Act attempted to clarify whether digital tokens are securities or commodities, providing a regulatory path for industry participants.

This series of moves has provided the sector with a larger safety margin. Coupled with real estate's similar scarcity attribute to Bitcoin (land cannot increase, but property itself can; building a house is akin to mining), the two are more readily combinable. Digitization helps break down high barriers. One of the Big Four accounting firms, Deloitte, in its financial sector report, predicts that by 2035, around $40 trillion worth of properties may be tokenized, far exceeding the less than $300 billion in 2024.

Tokenization can split large real estate assets into small fractions, providing a low-entry, high-liquidity way for global investors to participate, and creating cash flow for sellers and buyers who were originally lacking funds. However, although the $4 trillion figure sounds impressive, like the institutional prediction that ETH's market cap will reach $85 trillion in the future, it is still open to debate. How far has it really developed? Perhaps we can find some Alpha in the market.

Fragmentation? Lending? Renting? Providing Liquidity? Playing Real Estate like DeFi

Unlike low-liquidity entities like gold or art, real estate comes with inherent financial attributes. And when combined with Crypto, it becomes even more diversified.

Although there were previous attempts, the 2018 collaboration between the Harbor platform and RealT introduced one of the earliest and larger-scale real estate tokenization projects based on blockchain.

Specifically, the RealT platform uses blockchain to tokenize property rights into tradeable RealTokens. Each property is held by an independent company (Inc/LLC), and investors purchasing RealTokens are equivalent to holding a portion of that company's shares, enjoying rental income proportionally. The platform leverages Ethereum's permissioned issuance mechanism, reducing the investment threshold (usually around $50), and all transactions and rental payouts are done on-chain, relieving investors of the traditional landlord's daily management duties. RealT distributes rental income weekly in stablecoin form (USDC or xDAI) to holders.

The expected returns come from the Return on Net Asset (RONA), which is the annual net rental income divided by the total property investment. For example, if a property's expected annual rental income minus expenses is $66,096, with a total investment of $880,075, the RONA is 7.51%. This value does not include leverage or property appreciation. The current platform's average return fluctuates between 6% and 16%.

The natural next step after tokenization is to apply it. RealT's properties themselves have no loans, and all funds come from RealToken sales. However, to allow holders to flexibly utilize assets, RealT has launched the Real Estate Money Market (RMM) module.

RMM is based on the Aave protocol, where you can do two things: first, provide liquidity, similar to LP interest in DeFi, investors can deposit USDC or xDAI into RMM and receive corresponding ArmmTokens, which accumulate interest in real time. Second, borrow against RealTokens by collateralizing them, using RealTokens or stablecoins as collateral to borrow assets like xDAI. There are two borrowing rate options: stable rate (similar to short-term fixed rates but adjusted when utilization is too high or rates are too low) and variable rate (floating based on market supply and demand).

Opening up the path of borrowing and lending implies the ability to leverage, just like real estate speculators borrowing money to buy houses a decade ago, taking out a mortgage to buy another house, and repeating the cycle. By leveraging RealTokens as collateral to borrow stablecoins to re-purchase RealTokens, this process can be repeated multiple times to increase the overall yield. It is important to note that with each additional layer of leverage, the health factor decreases, and the risk increases.

Note: The health factor is the reciprocal of the collateral value-to-loan value ratio; the higher the health factor, the lower the liquidation risk. When the health factor drops to 1, it means the collateral value equals the loan value, which may trigger liquidation. Ways to avoid liquidation include repaying part of the loan or adding more collateral. (Similar to margin in perpetual contracts)

Aside from real estate being used as "collateral" for loans, there has been more recent discussion around using cryptocurrency-native assets to collateralize loans for real estate purchases. Fintech company Milo allows borrowers to use Bitcoin as collateral to obtain up to a 100% loan-to-value ratio for a mortgage. By early 2025, Milo had completed $65 million in crypto mortgage transactions and disbursed over $250 million in loans. At a policy level, the Federal Housing Finance Agency (FHFA) has required mortgage giants Fannie Mae and Freddie Mac to consider compliant crypto assets in risk assessment. While the interest rates for crypto mortgages are generally close to or slightly higher than traditional mortgages, the primary attraction lies in the ability to obtain financing without having to sell off crypto assets.

Further Reading: "Bitcoin Mortgages: A $6.6 Trillion New Frontier"

A Redfin survey also revealed that about 12% of first-time homebuyers in the U.S. used cryptocurrency gains to pay their down payment (through sales or collateral loans) in the post-pandemic era. Coupled with the shift in policy direction, it will undoubtedly attract "big players" to enter the scene, and "Crypto Real Estate" has seen the participation of a high-end real estate economic company for the first time.

In July 2025, Christie's International Real Estate became the first global luxury real estate agency to establish a department focused on cryptocurrency, marking a significant case of integration between traditional high-end real estate brokers and digital assets. Interestingly, this move was not driven by a top-down strategic initiative but rather in response to the genuine needs of high-net-worth clients.

A senior executive at Christie's stated, "An increasing number of wealthy buyers want to complete real estate transactions directly with digital assets, prompting the company to proactively build a service architecture supporting end-to-end crypto payments." In Southern California, Christie's has already completed multiple multi-million dollar luxury home transactions fully paid with cryptocurrency, totaling over $200 million, all at the 'eight-figure' level of top-tier residential deals. Currently, Christie's holds a portfolio of crypto-friendly properties worth over $1 billion, encompassing numerous luxury homes willing to accept 'pure cryptocurrency bids'.

One of the homes that accepted pure cryptocurrency payment is the $118 million mansion named 'La Fin' located in Bel-Air, Los Angeles, featuring 12 bedrooms, 17 bathrooms, a 6,000-square-foot nightclub, a private wine cellar, a sub-zero vodka tasting room, a cigar lounge, and a rock climbing wall-equipped gym. Previously listed for as high as $139 million, source: realtor

Christie's crypto real estate division not only offers payment channels based on mainstream crypto assets such as Bitcoin and Ethereum but also collaborates with custodial institutions and legal teams to ensure transactions are completed within a compliant framework. This includes cryptocurrency payment custody, tax and compliance support, asset matching (a bespoke crypto property portfolio meeting the specific investment needs of high-net-worth clients)

Christie's Real Estate CEO Aaron Kirman predicts, "In the next five years, over one-third of residential real estate transactions in the U.S. may involve cryptocurrency." Christie's transformation indirectly confirms the penetration of crypto assets among the high-net-worth population and foretells a structural change in the traditional real estate transaction model.

Infrastructure is becoming more mature, but 'user' education seems to have a long way to go

As of now, real estate tokenization projects have begun to take shape, but they seem to have not yet reached the level anticipated. RealT has tokenized over 970 rental properties to date, bringing in nearly $30 million in pure rental income for users; while Lofty has tokenized 148 properties in 11 states, attracting about 7,000 monthly active users who, through token holdings, share around $2 million in annual rental income. The sizes of these projects are almost in the tens of millions to billions of dollars range, yet they have failed to break through for various reasons.

On one hand, blockchain indeed allows transactions to transcend geographical limitations, achieve cross-border instant settlement, and have lower transaction fees compared to traditional real estate transfer costs. However, investors need to understand that this is not a 'zero-cost' ecosystem: token minting fees, asset management fees, transaction commissions, network fees, and potential capital gains tax constitute a new cost structure. Compared to the 'one-stop service' of traditional real estate brokers and lawyers, crypto real estate requires investors to actively learn and understand smart contracts, on-chain custody, and crypto tax rules.

On the other hand, while liquidity is a selling point, it comes with higher volatility. Tokenized real estate can be traded 24/7 on the secondary market. Investors can not only receive rental income but also exit their positions at any time. However, when liquidity is low, the token price may deviate significantly from the true valuation of the property itself. Market fluctuations may occur more rapidly than in the physical real estate market cycle, increasing the speculative nature of short-term trading.

Furthermore, many platforms introduce DAO (Decentralized Autonomous Organization) governance, allowing investors to vote on matters such as rent and maintenance. This kind of involvement is similar to playing "Monopoly," lowering barriers to entry, enhancing interactivity, but also imposing new requirements on users: they need to understand not only property management but also on-chain governance and compliance. In the absence of sufficient education, investors may misjudge the risk, viewing digital real estate as a short-term arbitrage tool rather than a long-term asset allocation.

In other words, the true barrier to entry for crypto real estate lies not in technology but in cognition. Users need to understand concepts such as loan-to-value ratio, liquidation mechanism, on-chain governance, tax declaration, etc., which represent a disruptive shift for those accustomed to traditional property purchasing methods.

With regulatory clarity gradually emerging, platform user experience improving, and mainstream financial institutions getting involved, the future of crypto real estate is poised to shorten this educational curve. However, in the foreseeable years, the industry still needs to invest more resources in user training, risk control education, and compliance guidance to truly transition "crypto real estate" from a niche exploration to mainstream adoption.

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