The investment niche is a wide one with several options. These options range from older investments like Gold and real estate to more recent ones like cryptocurrency. Due to the different available options, people find it difficult to make wise investment decisions. However, over the years, real estate and bitcoin have been top choices for many investors. Both options have proved to be a great means of growing wealth in the long term. While more people are looking to buy bitcoin, the real estate niche also keeps welcoming new investors on daily basis.
Have you ever thought of the better option between Bitcoin and real estate? This article compares bitcoin and real estate as an investment option to help you with your decision-making. Both have benefits and also risks that come with it. You can also check out which investment to go for – gold, stocks, or bitcoin investment?
Bitcoin OR Real Estate: Which has more potential?
Bitcoin has the potential of having an incredible return on investment. The digital asset is about 12 years old and its adoption keeps growing everyday. Since it was created, the price has grown exponentially. If bitcoin can have this massive growth in just a decade, there is much to expect from this digital asset if you invest and keep it for a longer period.
The growth of the real estate market is quite slow compared to bitcoin. It has stable prices and spikes in price happen on only a few occasions. Unlike bitcoin that has the potential of providing a great return in a short term, real estate investment could take a while before yielding returns.
Impact of economic crisis
One of the reasons for the creation of Bitcoin is to serve as a currency independent of any financial institution. Once you purchase BTC, there is no need to worry about inflation. The digital asset is not controlled by any government or central body thereby free from economic crises of any country.
Conversion to cash
Bitcoin can be converted to cash in minutes. Selling your bitcoin is not a problem. This is because exchange platforms like Remitano provide an easy means to convert your bitcoin to local currency in minutes.
Real estate investment on the other hand is not easy to sell off. Before you can sell off any of your real estate portfolios, you have to list and find a buyer. This can take months depending on how fast you get a buyer and several other factors.
Who controls the investment?
One of the strengths of bitcoin is that there is no central authority controlling it. Bitcoin doesn’t have a central bank or body that determines the rate, transaction fees, or administration. However, government policies can determine the price in the real estate market.
Which is more stable?
The real estate market is not as volatile as the crypto market. The real estate market is stable and the value doesn’t fluctuate like the value of bitcoin. Bitcoin is highly volatile. Bitcoin had a memorable year in 2017 when it reached an all-time high of $19,000. A couple of days later, bitcoin witnessed a heavy decline and later went as low as $4,000. However, in 2020, bitcoin had a very good run and it went past all the resistance levels to reach $30,000 before setting another ATH of $41,000 in January 2021 and it’s now sitting close to $60,000 according to Coinmarketcap. This shows how volatile the bitcoin market is.
Which is more expensive to start?
Investing in real estate is expensive. It is one of the main reasons why people consider other investment options. Bitcoin investment is cheaper. You can invest any amount in bitcoin. With just a little amount, you can always buy BTC and see it appreciate in value.
Which is tangible
If you invest in real estate, you own a property already and you have something tangible you can always bank on. Bitcoin investment on the other hand is a digital investment held in a wallet, more like digital money that can be spent at any point in time, unlike real estate that is a physical asset.
The real estate investment class is diversified. You can have multiple real estate portfolios. This means, if something goes wrong with one of the assets, other portfolios will keep you safe. This is different with bitcoin. Irrespective of the number of wallets you have, a fall in the price of bitcoin will affect all your bitcoin portfolio. However, you can diversify your portfolio with several different Altcoins.
Maintaining your real estate investment requires a huge amount. Although, regular maintenance might not be required, however, maintaining it in the long term can cost a whole lot. Bitcoin on the other hand doesn’t require any form of maintenance as it is a digital asset. You don’t have to spend any amount to maintain your bitcoin wallet. All you have to do is purchase BTC and monitor its growth.
Bitcoin doesn’t have a central authority controlling it. You are fully in charge of your assets. It is independent of any financial institution or government. While some people believe this could be a disadvantage since no one is regulating it, this feature has, however, proved to be more of a positive rather than a negative.
Real estate on the other hand has the investment trust that oversees the market.
This article has analyzed the pros and cons of both investment options. However, every smart person prefers to have multiple investment options to diversify their source of passive income. So investing in both real estate and bitcoin isn’t a bad idea. While real estate requires huge capital, you can buy bitcoin with a small amount and build your investment gradually.