Real Estate Investment Manager Luis Ernesto Dominguez
Luis is a real estate expert in El Salvador. In a compelling article Luis wrote his personal experiences as an investment manager in the country, having attended several bitcoin events and being in the middle of the development in the country, he is the expert to turn to in El Salvador. Following are elements excerpted from his article, in addition to elements taken from Naeem Aslam’s article on Nasdaq News. Read Luis’ whole expert article here.
Bitcoins, in their essence, is digital money. The blockchain is a database which records peer-to-peer transactions of this digital money. Who owns bitcoins is publicly visible on these blockchain databases. Contrary to ‘normal’ currencies, bitcoins, or cryptocurrencies, are not backed by regulatory systems, central banks nor other institutions. The transactions happen between ‘peers’ and with a growing number of people wanting a digital currency free from government oversight, the value will increase over time. Mind you, cryptocurrencies are not backed up by another currency or another ‘Bretton Woods gold standard’ and are in general quite volatile because of the influence by supply and demand, the possibility to use, investor and user sentiments, government regulations and of course the media hype.
Nevertheless, bitcoins being a legal tender in El Salvador means that it is possible and allowed to use and invest bitcoins in real estate in the country. Latest figures from the tourism industry show that tourism has risen in El Salvador since the formal acceptance of bitcoin as a legal tender in June 2021(Ley Bitcoin DECRETO N° 57, June 8th, 2021). With a rising technology-based workforce seeking a beach to send their emails from or do their Zoom calls from, interestingly priced real estate is on the rise in the country. Considering that quite a few crypto companies have chosen Miami as their office locations and considering the high priced and soaring real estate market in Miami, a developing opportunity in El Salvador certainly exists.
Bitcoin Beach
The project Bitcoin Beach in El Salvador is creating a sustainable Bitcoin Economic ecosystem on the coast of El Salvador, where most people do not have access to bank accounts and the local businesses could never qualify for merchant accounts needed to accept credit cards. From the early days, Bitcoin promised to allow to bank the unbanked, and return power back from governments and financial institutions to the individual. However, until recent, this promise has remained elusive. Bitcoin Beach is a movement to make sure the true potential of Bitcoin is realized, and that those who have been excluded from the banking system are the primary beneficiaries. Backed by the donation of an anonymous early Bitcoin adopter, Bitcoin Beach has made it its mission to prove that Bitcoin can have the biggest impact on the lives of those that society often ignores.
A panel of bitcoin experts met in the Garten Zonte Hotel in El Salvador on March 28th and was hosted by the bitcoin couple Max Keiser and Stacey Herberth, founders of Bitcoin Capital, and now crypto billionaires. with participation of Jeff Booth, the visionary technology leader who founded BuildDirect a technology company that aimed to simplify the building industry, and Austin Hill, ex-cyberpunk turned an angel investor.
Max Keiser planted the seed for El Salvador to issue Bitcoin Mining Volcano Bonds, and President Bukele of El Salvador saw merit in the idea. A $1 billion Volcano-Bitcoin Bond to buy bitcoin, develop Bitcoin City and produce renewable geothermal energy to mine bitcoin is on the way.
Max Keiser’s predictions are well known: he assures that bitcoin will become the world’s reserve currency, that it will dismantle central banks and the IMF, and that real estate prices in El Salvador will triple in the next decade as a direct consequence of the adoption of bitcoin as legal tender. El Salvador must thank Max Keiser for his efforts to promote the bitcoin project of El Salvador on the world stage. Max has become a citizen of El Salvador, is currently living at El ZonteBeach and has established an investment fund in El Salvador.
Max Kaiser and President Bukele are pitching the bitcoin project of El Salvador, creating “Bitcoin foreign tourists”, who can later become “Bitcoin business travellers” and finally “Bitcoin foreign direct investors”. Max and Bukele are playing in the big boy leagues and love the media attention. In contrast to them, El Salvador also enjoys the attention of people like Mike Peterson who has adopted a low profile. Mike was the original creator of the Bitcoin Beach project in El Zonte, and his approach has been focused mostly on grassroots work and is supported by the local communities in the country.
Bitcoin City
In short, it can be expected that investors are going to be very active in El Salvador’s real estate market and offer a very interesting alternative to Miami. Early initiatives are ongoing,and the “Bitcoin City” project will come off the ground. El Salvador’s President Bukele in April revealed the first-ever cryptocurrency-funded city in the world. Also, banks may start to offer special products through which investors can use their bitcoin as collateral to purchase real estate on favourable terms, according to Naeem Aslam, the specialist in blockchaintechnologies. Only recently, Mexican architect Fernando Romero visited El Salvador and the proposed area where Bitcoin City will arise.
El Salvador’s beaches, lakes, and mountains will always be a good second home destination if they have good impact in the surrounding communities and if gentrification is avoided, and the character of the area is not changed by new business moving in, but with respect for the existing population, new opportunities are brought in.
(Edits by Thijs Stoffer)
Luis Ernesto Dominguez
