Billionaire Rick Caruso, the real estate company of the same name, jumps into the world of cryptocurrencies, announcing on Wednesday that it will start accepting bitcoin as rent payment for its residential and retail properties.
The private company said it also invested some of its corporate treasury in bitcoin and entered into a partnership with Gemini, the cryptocurrency exchange and custodian led by CEO Tyler Winklevoss.
“We think cryptocurrency is here to stay. We believe bitcoin is a good investment for us,” Caruso said in an interview Wednesday on CNBC’s Power Lunch. “We have allocated a percentage of what would normally go on the bitcoin capital markets.”
The moves from the Caruso company in Los Angeles represent the latest institutional adoption of bitcoin, which is seen as a factor that helps the world’s largest cryptocurrency to rise in price in recent months. Bitcoin traded just under $ 56,000 a coin on Wednesday, up from about $ 11,000 a piece in early October, according to Coinbase.
Earlier this year, Tesla bought bitcoin using cash on its balance sheet, and the company led by Elon Musk later began accepting it as payment for its electric vehicles. Jack Dorsey’s market also bought bitcoin for its corporate treasury.
There have also been moves from Wall Street firms. Morgan Stanley was the first large US bank to announce that it would provide access to bitcoin funds for its wealth management clients, CNBC reported last month. Goldman Sachs’ private wealth management group is also expected to soon offer its clients investment vehicles for bitcoin and other digital assets.
Grove Mall in Los Angeles, California
Robyn Beck | AFP | Getty Images
Caruso’s properties include open-air malls The Grove in Los Angeles and Americana at Brand in Glendale, California. Americana also has luxury apartments.
While consumers will eventually resume the activities they stopped during the Covid pandemic, Caruso told CNBC that the health crisis will lead to some fundamental behavioral changes. “The companies that gain loyalty will be the companies that anticipate these changes and meet the consumer where they are and that helps Gemini do it,” he said.
“Cryptocurrency will be part of any 21st century retail and real estate experience,” said Winklevoss, who appeared with Caruso at Power Lunch. Winklevoss and his twin brother, Cameron, are top cryptocurrency investors and have long-term opinions about bitcoin.
Caruso provided an example that he saw playing involving cryptocurrencies and the rewards of the company’s consumers.
“Our loyalty program, which I imagine in collaboration with Gemini and Winklevosses, is that you will win coins. You will win a cryptocurrency,” Caruso said. “You can use the cryptocurrency on the blockchain then to spend on our properties. Access our resort. When you live with us, pay your rent. We create this whole ecosystem.”
Some critics of bitcoin have questioned its current price, as well as its usefulness as a means of transaction. Given its classification from the domestic revenue service, there are also tax implications of using bitcoin to make purchases.
Caruso said his company’s entry into the crypto is part of a long-term bet. “It’s not about next year or five years,” he said. “We look forward to the next decade.”