written by Hunter Ruzicka, Acorn Estate and Letting Agency


Bitcoin vs Real Estate: WHICH IS THE BETTER INVESTMENT FOR 2021
 
Bitcoin is the newest market in the world, and probably the fastest-growing one. On the other hand, real estate is one of the oldest markets and has its own fans. What is your choice between these two different investment fields, real estate or Bitcoin?

Andrew Carnegie once said that 90% of all millionaires become so through real estate and for a long time, real estate has been one of the best ways of making money globally.

Bitcoin is the most hyped asset class in the market right now. With its exponential rise in value over the last decade, Bitcoin has captured the attention of individual and institutional investors all over the world. 

So before we talk about which is the better investment bitcoin or real estate, let’s first understand what Bitcoin actually is and how it works.

 

What is Bitcoin?

Satoshi Nakamoto an individual or group created Bitcoin in 2009 and like any other currency, it can be used to buy goods and services from merchants that accept Bitcoin payments. Known as a cryptocurrency which is a form of currency however it is digital.

To create Bitcoins the process is called “mining” and is done by solving complex maths problems.  These coins are then stored in a “digital wallet” in the cloud on smartphones and also on computers and from these wallets the user can pay for goods, save money and also send and receive Bitcoin.

 

Main characteristics of Bitcoin:

Decentralized – Bitcoin is not controlled by any single institution unlike conventional currencies which are controlled and regulated by central banks.
Anonymous – With Bitcoin people can transact without revealing their identity unlike financial institutions where they know almost everything about their customers; phone numbers, credit history, spending habits, etc.
Transparent – All Bitcoin transactions are stored permanently in the Blockchain which is visible to the public.

Bitcoin investing is getting popular mainly due to the following:

Low entry levels – Bitcoin can be subdivided into smaller units called satoshis. This means that you can start buying Bitcoin with as little as $100.
Stability – Bitcoin was the first cryptocurrency and now there are over 8000 since 2009 Bitcoin has proven to be a reliable and secure asset.
Rising prices – More individual and institutional investors are rushing to purchase Bitcoin as the price has steadily risen. It is projected that the price of one Bitcoin will surpass $100,000 in a few years, at the time of this writing Bitcoin was $48,087. (16.02.2021)

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Here are some reasons why Bitcoin may not be the best investment in 2021:

Bubble - The sharp spike in the price of Bitcoin over the past years is based mainly on speculation, rather than fundamentals and this could be a bubble waiting to burst. 
Security - Bitcoin is at risk from malware, hackers, and operational glitches due to being stored digitally. If a hacker gets access to a Bitcoin investor’s private encryption keys, they can easily transfer the Bitcoins to a different account.
Volatility – Bitcoin is a very risky investment in 2017 Bitcoin value rose from about $1,000 to a high of $19,783 in December then by April 2018, the value went back down to $7,000.
Regulations – To Governments Bitcoin is viewed as a rival to the conventional government currency also digital currency has been used for illegal activities such as money laundering, tax evasion also black market transactions.  As a result, governments are likely to find a way to restrict, regulate, or even ban the sale and use of Bitcoins as did India recently.

 

What is the real estate industry?

Real estate investment is the act of buying/selling/renting a property to make money. There are various approaches in this field such as flipping homes, renting business spaces, providing assignment resale, becoming a residential landlord, renting out a vacation property, or even embarking on something like Airbnb.

Clearly, real estate involves tangible assets and provides clear value to the owner. Real estate assets usually have remarkable durability and stability in value so it’s perfect for those who are patient enough.

 

Real estate is,
Limited: the amount of land on our planet is limited
Necessary: all people need property to live
Flexible: many buildings can provide you with several applications without major changes.

 

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The Big Question: Real Estate vs Bitcoin?

Comparing real estate vs Bitcoin, we feel that real estate is the best way to invest money. Here is why real estate investing is the way to go in 2021:
Backed by tangible asset value – Real estate investments are backed by physical structures or land.
Source of cash flow – Investing in rental properties (traditional or Airbnb) allows you to enjoy cash flow through monthly income.
 
Conclusion
Bitcoin is a highly speculative asset with incredible rewards and risks. If you choose to venture into it, do so with utmost caution. But at the end of the day, real estate is generally the better investment.
The good news is that you can even buy real estate with Bitcoin. Combining the two investments, for some this is the best of both worlds.

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