Harbor, a blockchain startup backed by billionaire bitcoin bull Peter Thiel, has received an additional $28 million investment that it hopes will make blockchain real-estate investing a reality.
This latest cash infusion was led by Thiel’s Founders Fund, venture-capital fund Andreessen Horowitz, and cryptocurrency investment firms Pantera Capital and Craft Ventures. The San Francisco-based Harbor secured $10 million in Series A financing in February 2018, raising its total investments to $40 million.
Harbor plans to launch a blockchain-based platform that will enable users to transform hard-to-trade assets such as real estate, investment funds, and expensive art into liquid, tokenized cryptocurrency securities that are compliant with U.S. securities laws.
Transform Your House Into A Crypto Token
“Tokenizing private securities allows issuers to lock up capital, without locking up investors,” Harbor CEO Joshua Stein explained in a statement. “The prospect of greatly increased liquidity for private securities will enhance capital formation, create new investment opportunities, and support economic growth.
Stein added, “Harbor is the enabling technology platform for securities issuers and broker-dealers to compliantly tokenize private securities.”
Billionaires Marc Andreessen and Peter Thiel are bitcoin bulls. (screenshots)
Napoleon Ta, a partner at Peter Thiel’s Founders Fund, said many individual and institutional investors are waiting for asset-backed securities like real estate and fine art to be tokenized before jumping in.
“We think Harbor has the right approach to solving the compliance challenges that will catalyze this monumental shift to the tokenization of traditional assets,” Ta said.
Harbor will use its latest $28 million cash infusion to continue development on its Ethereum-based R-Token platform, an open-source compliance protocol that will perform due diligence, including “Know Your Customer” (KYC) and “Anti-Money Laundering” (AML) checks.
“The complex legal, tax and contractual requirements inherent in this process will be addressed by Harbor’s compliance protocol and platform,” the company said.
New Trend: Buying Real Estate With Bitcoin
As it is, the real estate industry has already embraced cryptocurrencies. Case in point; there’s a growing number of real estate transactions that are being done using bitcoin and other virtual currencies.
In early-April 2018, a hedge fund millionaire put his six-story Manhattan townhouse on the market, according to multiple press reports. His asking price? A cool $30 million or $45 million in cryptocurrency.
Claudio Guazzoni de Zanett said he would accept payment in bitcoin (BTC), Ripple (XRP), or Ethereum (ETH), and explained that his higher listing price in cryptocurrencies is due to the market’s erratic price swings.
Trend alert: More people are buying homes using bitcoin. (Image: Pixabay)
In 2017, a buyer in Texas made the first-ever purchase of a home using only bitcoin for payment, as BTCManager has reported. The buyer’s broker, Sheryl Lowe of Kuper Sotheby’s International Realty, said the bitcoin transaction was the easiest she had ever conducted.
“In all of my 33 years of closing transactions, I honestly couldn’t have expected something so unique to go so smoothly,” Lowe said. “In a matter of ten minutes, the bitcoin was changed to U.S. dollars, and the deal was done!”
Another hot trend involves bitcoin bulls flamboyantly buying Lamborghinis using bitcoin. “Buying the Lambo with bitcoin is proof it can be used for real transactions, buying really cool stuff,” computer coder Peter Saddington gushed.
Institutional Money Migration ‘Inevitable’
While cryptocurrency skeptics point to bitcoin’s wild price fluctuations as “proof” that bitcoin is a bubble that’s bursting, the media hype and investor interest in crypto has never been hotter.
Institutional money has already started trickling into blockchain and crypto, and a bigger migration is “inevitable,” according to some experts.
Ari Paul, a former portfolio manager at the University of Chicago (which has a $7.8 billion endowment), says it’s only a matter of time before multi-billion-dollar university endowments start investing in crypto, as BTCManager has reported.
“I do think it’s inevitable from a few angles,” said Paul, who’s now chief investment officer of crypto investment firm BlockTower Capital.
Paul said he’s aware that pension funds and university endowments began researching cryptocurrencies as investments starting in 2015. They haven’t made the leap yet because they’re worried about bitcoin’s volatility.
But Paul said it’s an inevitability because they’re already sitting on the fence — ready to make the jump. “Endowments could pull the trigger at any moment,” he said. “They’re on the fence.”