Real Estate Tokens' Traders: Driven by Crypto Hype or Cash-Flow

Bertram Steininger, Julia Kreppmeier, Ralf Laschinger and Gregor Dorfleitner

ERES from European Real Estate Society (ERES)

Abstract: After solving the double-spending problem of digital assets (tokens), the application possibilities of digital rights and goods have increased enormously over the past years. Even if the market for digital tokens is in its infancy, it is an innovation that has the potential to disrupt how we transfer ownership of financial instruments. The real estate market has been identified as a major market for digital fractional ownership using the Distributed Ledger Technology (Blockchain). In addition to funds and REITs, real estate tokens are an additional form of indirect investment vehicles, which lower the high entry barriers into the asset class of real estate and allow diversification in multi-asset portfolios.We collected the data of real estate tokens in the USA between 2019 and 2021 and trace back the transactions published on the Blockchain. In doing so, we analyze the success determinants of Security Token Offerings and secondary market trading. We disentangle the success on the property and wallet/investor level. We find that in addition to the fundamental factors (cash-flow, size, and property type), also the market sentiment for the local real estate market and general crypto market are relevant for explaining the success of the offering. The attractiveness of the location is of minor importance.

Keywords: blockchain; Digital Asset; Real Estate Token; Security Token Offering (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
New Economics Papers: this item is included in nep-pay and nep-ure
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