Billionaire Rick Caruso’s eponymous real estate company is jumping into the cryptocurrency world by announcing Wednesday that it will begin accepting bitcoin as rent on its residential and retail properties.
The private firm said it has also invested part of its corporate treasury in bitcoin and has partnered with Gemini, a cryptocurrency exchange and custodian led by CEO Tyler Winklevoss.
“We believe that cryptocurrency is not going anywhere. We believe bitcoin is the right investment for us, ”Caruso said in an interview Wednesday on CNBC’s Power Lunch. “We have allocated a percentage of what usually goes to the capital markets in bitcoin.”
The actions of Los Angeles-based Caruso represent the latest institutional adoption of bitcoin, which is seen as one of the contributing factors to the soaring prices of the world’s largest cryptocurrency in recent months. Bitcoin traded just under $ 56,000 per coin on Wednesday, up from $ 11,000 per coin in early October, according to Coinbase data.
Earlier this year, Tesla bought bitcoins with cash on its balance sheet, and the company, led by Elon Musk, later began accepting them as payment for its electric vehicles. Jack Dorsey Square also acquired bitcoins for its corporate treasury.
There was also movement from Wall Street firms. Morgan Stanley was the first major US bank to announce that it would provide access to bitcoin funds to its asset management clients, CNBC told CNBC last month. The wealth management group at Goldman Sachs is also expected to offer their clients investment vehicles for bitcoin and other digital assets soon.
Grove Shopping Center in Los Angeles, California
Robin Beck | AFP | Getty Images
Caruso owns open-air malls The Grove in Los Angeles and The Americana at Brand in Glendale, California. The Americana also has luxury apartments.
While consumers will eventually resume activities they paused during the Covid pandemic, Caruso told CNBC that the health crisis will lead to some fundamental changes in behavior. “The companies that have won their loyalty will be companies that anticipate this change and meet the consumer where they are, and this is where Gemini helps us do it,” he said.
“Cryptocurrency will be part of every 21st century retail and real estate experience,” said Winklevoss, who appeared with Caruso at Power Lunch. Winklevoss and his twin brother Cameron are the first high-profile crypto investors and hold an optimistic long-term view of Bitcoin.
Caruso gave one example he could see in a cryptocurrency raffle and a company’s consumer rewards.
“Our loyalty program, which I represent with Gemini and Winklevoss, is that you will earn coins. You will earn cryptocurrency, ”said Caruso. “You can use this cryptocurrency on the blockchain and then spend on our property. Register at our resort. When you live with us, pay the rent. We are creating this entire ecosystem. “
Some critics of Bitcoin have questioned its current price as well as its usefulness as a means of transaction. Considering its classification by the IRS, the use of bitcoin for purchases also carries tax implications.
Caruso said his company’s entry into cryptocurrency is part of a long-term bet. “This is not about next year or five years,” he said. “We are looking forward to the next decade.”