Real estate owners are starting to warm to the idea of cryptocurrency as a form of payment, both from tenants and in property transactions. However, there are some concerns keeping cryptocurrencies from penetrating the mainstream market—and the inherent risk is at the top of the list.

A recent Bloomberg article called Bitcoin's volatility in valuation evidence that the cryptocurrency market is "unsustainable, stimulus-fueled frenzy." Andrew M. Ouvrier, a partner at Cox, Castle & Nicholson LLP, also notes that this is one of the risks of using the currency in the real estate market. "On April 17, 2021, the value of Bitcoin plunged more than 14%, before rebounding slightly, causing the values of other cryptocurrencies to suffer similar large drops," Ouvrier tells GlobeSt.com. "Then on April 23, 2021, the value of Bitcoin and other cryptocurrencies plunged further as a result of a massive sell-off that wiped out over $200 billion of market value due in large part to the announcement that President Biden is expected to raise long-term capital gains taxes. China's recent announcement that it would crackdown on the practice of Bitcoin mining caused Bitcoin's value to plunge even farther."

These changes in pricing are a red flag for many owners. "This volatility creates a realistic concern that the Bitcoin that is accepted for rent on day one could lose a large percentage of its value on day two, although, of course, there is also the possibility that the value of the accepted Bitcoin might instead surge on day two," explains Ouvrier, adding that investors are also concerned that the currently unregulated market could soon see increased government regulation. "There is also concern that U.S. regulators may be ready to tighten their oversight of digital currency and related businesses, which may have a chilling effect on cryptocurrency-based transactions," he says.