Real Estate vs.Bitcoin - Which is the Wiser Investment

Everybody is talking about Bitcoin! The cryptocurrency that has turned paupers into millionaires and left us all kicking ourselves for not jumping on the bandwagon earlier. Many people haven’t invested in cryptocurrency for their own reasons, but when it comes to investing our hard earned money, we want an investment that is low risk and high return. Here we are going to compare the world’s oldest investment, real estate, with the latest opportunity in cryptocurrency. 

Bitcoin and Cryptocurrencies:

First off, what on earth is a bitcoin?

In very broad strokes, bitcoin and cryptocurrencies are strings (or lines) or code (or data) which help people exchange value. The concept may be difficult to grasp but it’s not too different from an E-Wallet or the information reflected in your bank account.  

The next question you may ask is “why are cryptocurrencies so valuable?”. 

Bitcoin is a limited resource such as gold, and there will only ever be 21 million coins mined. It also acts as any other currency that can be exchanged for goods and services, from a stick of gum to a hot-air balloon ride over Everest piloted by a Swiss model. The biggest difference between bitcoin and rands, dollars, or euros is that cryptocurrencies are not owned, produced, taxed, or controlled by any government or centralized institution. This means that the currency won’t be affected by any political turmoil in any one country, unlike the global recession in 2008 caused by unregulated bank loans within a single country.

So why has there been so much controversy towards bitcoin? 

It’s important to remember that even though bitcoins value has skyrocketed since its development, it hasn’t been a steady climb during its current price discovery phase. Bitcoin has the potential for high rewards, albeit with relatively higher risks at present. Nothing is certain in the bitcoin game and if you don’t secure your coins properly, monitor their value often, and sell at the right time, the possibility of losing value is still too high for many. 

Real Estate and Property:

Real Estate is the world’s oldest investment and for good reason too. Everyone needs a place to live and everyone wants the best home they can have. Unlike other investments, real estate gives you the opportunity to have some control over the return you’ll make. This control is usually done by investing in the existing property through renovations and wisely choosing the best representative, your trusted real estate agent, to handle the sale of your asset, the property. 

Investing in real estate is a slow growth investment with relatively low risk, which means that you’ll most likely own the property for a while before seeing any large return. Property and real estate value also tends to be safe from rapid fluctuations in value unlike other investments. 

So why doesn’t everyone invest in property? It’s a slow game which requires a high initial investment for a higher return. Not many people are able to afford property or have the patience to wait for the money to roll in after years of ownership. Investment in property is usually left to those who can see the bigger picture and have the patience to slowly and surely build up their wealth.

Regardless of which option you decide is the best investment for you, always bear in mind what Warren Buffett said about investing: “Only buy something you would be happy to own if the market shut down for 10 years.”