Billionaire Rick Caruso’s real estate company of the same name jumps into the world of cryptocurrency and announced on Wednesday that he will start accepting bitcoin as a lease payment at his residential and retail properties.
The private company said it had also invested a portion of its treasury in bitcoin and entered into a partnership with Gemini, the exchange custodian and custodian led by Tyler Winklevoss.
“We believe that cryptocurrency is here to stay. We believe that bitcoin is a real investment for us,” Caruso said in an interview on CNBC’s ‘Power Lunch’ on Wednesday. “We have allocated a percentage of what normally goes into bitcoin in the capital markets.”
The shifts from Caruso’s Los Angeles business represent the latest institutional adoption of bitcoin, which is seen as one factor driving the world’s largest cryptocurrency rise in recent months. Bitcoin traded just under $ 56,000 a coin on Wednesday, compared to $ 11,000 a piece in early October, according to Coinbase.
Tesla bought bitcoin with cash on its balance sheet earlier this year, and the Elon Musk-led company later began accepting it as payment for its electric vehicles. Jack Dorsey’s Square also bought bitcoin for its corporate treasury.
There were also moves from Wall Street businesses. Morgan Stanley was the first major U.S. bank to announce that it would provide access to bitcoin funds for its wealth management clients, CNBC reported last month. The private wealth management group at Goldman Sachs is expected to soon offer investment vehicles for bitcoin and other digital assets to its clients.
The Grove Mall in Los Angeles, California
Robyn Beck | AFP | Getty Images
Caruso’s properties include The Grove outdoor centers in Los Angeles and The Americana at Brand in Glendale, California. The Americana also has luxury apartments.
While consumers will eventually resume the activities they interrupted during the Covid pandemic, Caruso told CNBC that the health crisis will lead to fundamental behavioral changes. “The companies that win their loyalty will be the businesses that expect the changes and meet the consumer where they are, and that’s what Gemini is helping us to do,” he said.
“Cryptocurrency is going to be part of any 21st-century retail and firm experience,” said Winklevoss, who appeared with Caruso on ‘Power Lunch’. Winklevoss and his twin brother, Cameron, are conspicuous early crypto investors and hold long-term views on bitcoin.
Caruso presented one example he could see playing with regard to cryptocurrency and the rewards of the company.
“Our loyalty program, which I aim to work with Gemini and the Winklevosses, is that you will earn money. You will earn a cryptocurrency,” Caruso said. “You can use the cryptocurrency on the blockchain and then spend it on our properties. Go to our resort. If you live with us, you pay your rent. We create this whole ecosystem.”
Some critics of bitcoin have questioned the current price, as well as its usefulness as a means of transaction. Given the Internal Revenue Service’s classification, there are also tax implications of using bitcoin to make purchases.
Caruso said his company’s entry into crypto is part of a long-term bet. “It’s not about the next year or five years,” he said. “We look forward to the next decade.”