Despite early hype, real estate tokenization has failed to garner significant momentum, leading some to question its future viability.
As the initial coin offering (ICO) boom subsided and the 2018 crypto bear trend began to set in, many analysts predicted that security tokens may drive the next market cycle — with the vast capital locked in the real estate sector being eyed hungrily for tokenization.
However, with the Bitcoin halving, Ethereum 2.0, and the emergence of DeFi capturing the imagination of crypto markets recently, real estate tokenization is no longer the flavor of the month, and some are questioning its viability.
Real estate tokenization in 2017/2018
In an article in The Investor, director of global research at real estate service company JLL, Matthew McAuley, stated:
“It’s been very slow going with blockchain in real estate, despite it being touted as a game-changer for a number of years now.”
The first property sale settled using cryptocurrency happened in 2017 when a $60,000 dollar apartment in Ukraine’s capital of Kiev was purchased by TechCrunch founder Michael Arrington using Ether via the Propy platform.
The following year, 2018, the momentum continued with ‘Aspen Coin’ distributing tokens representing $18 million in fractionalized ownership in a five-star, 179-room resort in Colorado.