What could have been a low-risk sale of a Rhode Island plot of land has turned into a wild bet on the price of the meme-inspired cryptocurrency dogecoin.
Earlier this month, on behalf of a client, CENTURY 21 realtor Kyle Seyboth accepted an offer of 160,000 dogecoins (DOGE-USD) — worth about $50,000 (or around $0.31 per digital coin) at the time — in exchange for the residential plot.
Then the wild ride began.
By the time the contract was drawn up on May 8, the 160,000 dogecoins were worth $116,000 (or around $0.72 per digital coin) — meaning the seller of the land was up big on the deal.
But the digital currency tumbled late that night after Tesla (TSLA) CEO Elon Musk called the dogecoin a "hustle" while hosting Saturday Night Live.
The digital currency, created in December 2013 by two software developers as a joke inspired by the internet meme involving a Shibu Inu dog, then briefly fell below the contract price this week during a broad crypto selloff on Wednesday.
"That was one of the risks — that he could be in the position that he has to take his lumps," Seyboth told Yahoo Money of the seller's land-for-doge deal. "But he’s an investor and pretty astute. And in his opinion, he wanted to lock the contract with the potential for the currency to go up and get more money."
The closing of the deal is on June 15. As of 3:12 PM ET on May 20, the 160,000 dogecoins were worth $63,520 (or around $0.40 per digital coin).
'With crypto, it’s a lot speculating or gambling'
On the other side of the transaction, according to Seyboth, is another real estate investor who had bought a lot of dogecoin and was betting that "the currency risk would work in their favor."
The buyer plans to build a spec house — a new, move-in-ready home — on the land before selling it.
The fact that both sides of the crypto-only real estate deal involve long-time real estate investors did not surprise Seyboth.
"Real estate for investors right now is very hard," he explained, noting that others have since contacted him to sell their properties for some kind of cryptocurrency. "There's not a lot of supply, and investors are struggling with supply to sell. Crypto has been a good type of offset."
The number of homes for sale at the end of March hit 1.07 million units, down 28.2% from a year ago and near historic lows, according to the National Association of Realtors. At the same time, the share of home sellers willing to take cryptocurrency for the purchase hit at an all-time high in April, albeit still at low levels.
Two of those sellers that Yahoo Money previously interviewed were both real estate investors.
"Their appetite for risk is very similar," Seyboth said, comparing real estate investors and crypto investors. "Stocks are harder to comprehend. They're a whole different animal with earnings, EBITDA. With crypto, it’s a lot speculating or gambling, and a lot of riding the momentum."