Billionaire real estate company of the same name Rick Caruso is jumping into the world of cryptocurrency, announcing Wednesday that it will begin accepting Bitcoin as a rental payment on its residential and retail properties.
The private company said it has also invested part of its corporate treasury in bitcoin and has entered into a partnership with Gemini, the cryptocurrency exchange and custody led by CEO Tyler Winklevoss
“We believe 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’ve allocated a percentage of what would normally go to the bitcoin capital markets.”
The moves of the Los Angeles-based company of Caruso represent the latest institutional adoption of bitcoin, which is seen as a factor helping to raise the price of the world’s largest cryptocurrency in recent months. Bitcoin was trading just below $ 56,000 per coin on Wednesday, up from $ 11,000 in early October, according to Coinbase.
Tesla earlier this year bought Bitcoin with cash on the balance sheet, and the company led by Elon Musk began accepting it as payment for its electric vehicles. Jack Dorsey’s Square has also bought bitcoins for his corporate treasure.
There have also been moves by Wall Street companies. Morgan Stanley was the first major U.S. bank to announce that it would provide access to bitcoin funds to 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 bitcoins and other digital assets.
The Grove Mall in Los Angeles, California
Robyn Beck | AFP | Getty Images
Caruso properties include The Grove Mall in Los Angeles and The Americana at Brand in Glendale, California. The Americana also has luxury apartments.
While consumers will eventually resume activities that paused during the Covid pandemic, Caruso told CNBC that the health crisis will lead to some fundamental behavioral changes. “The companies that build loyalty will be the ones that anticipate these changes and meet with the consumer wherever they are, and that’s what Gemini is helping us do,” he said.
“The cryptocurrency will be part of any real estate and retail experience of the 21st century,” said Winklevoss, who appeared alongside Caruso on “Power Lunch”. Winklevoss and his twin brother, Cameron, are high-profile early cryptocurrency investors and have long-term bullish views on bitcoin.
Caruso offered an example he could see playing with the company’s cryptocurrency and consumer rewards.
“Our loyalty program, which I imagine working with Gemini and the Winklevosses, is that you will earn currency. You will earn a cryptocurrency,” Caruso said. “You can use this cryptocurrency in the blockchain to spend it on our properties. Register at our resort. When you live with us, you pay the 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 of the Internal 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 are looking forward to the next decade.”