Back to InsightsCryptocurrency in Aviation Creating Transaction Opportunities
Private aviation has seen an influx of concept, or first-time, buyers in the past two years. Many have come to flying privately because of the inherent advantages it offers. One of the big reasons why more people have been able to have the resources necessary for aircraft ownership? Cryptocurrency.
The rise of cryptocurrency has been one of the major stories in finance over the past decade, but it has been transformative over the last couple of years.
It was just a matter of time before society’s investment in cryptocurrency would make its way to aviation, and it has. It isn’t just individual investors who have made significant gains with crypto, large funds have made trading crypto more widespread and accepted by the public.
At Hatt, we’re bullish on cryptocurrency’s place in aviation. It’s the fastest way to move money anywhere on the planet, and we believe that will have great value for buyers in the future. It’s also why we are willing to accept major cryptocurrencies – Bitcoin, Ethereum and Solana – directly for our brokerage fees.
So what do businesses or individuals need to know about entering the marketplace for aircraft ownership?
Like most first-time buyers, they may be unfamiliar with the nuances of aircraft transactions. Getting advice from seasoned aviation professionals, like Hatt & Associates, allows them to ensure they’re purchasing the aircraft that truly fits their needs, and to learn about all of the additional aspects and steps to follow. Having advisors who are looking out for the buyer, and guiding them, will end up saving money in the long run, as well as making sure an aircraft purchase doesn’t turn into an aircraft regret.
Another factor to consider about cryptocurrency in aviation is buying a plane isn’t as simple as opening one’s crypto wallet and hitting send to complete a transaction. As things stand, exclusively crypto can’t be used as the money to buy an aircraft.
Cryptocurrency can’t be used for escrow because there is currently no company who will insure the value of the funds while the transaction is completed – a time period that can last weeks or months. Insurance companies are wary of the price volatility of the asset, which is understandable because it can fluctuate 3 to 4% a day.
At some point, this issue will be solved. It might be through regulations that protect both parties, or it may come as larger groups get more comfortable with the full-scale adoption of cryptocurrency. If you’ve seen how prevalent crypto ads were in the recent Super Bowl or play daily on financial television channels, you might conclude that time is sooner rather than later. That time frame could be in the next six months.
In any case, the straight cryptocurrency-into-aircraft transaction is really not that much different than any other asset used to make a major deal. Sellers are unlikely to accept the purchase price in straight stock shares or real estate. Those items usually have to be liquidated into a standard currency – dollars, pounds, euros or whatever is requested – prior to the transaction.
Having an aircraft transaction team that also has strong connections with financial advisers can make a big difference there, as well. Our Hatt team has the experience in both brokerage and consulting. We coordinate with vetted escrow agents and work with top-flight law firms who know complex transactions.
Contact us to walk you through all of your options in aircraft purchasing. Whether it’s through traditional or blockchain-based currencies, we can help provide answers and solutions.