Ron Matin
The dramatic growth of cryptocurrencies, including Bitcoin, has been so significant that some investors are eager to invest in Bitcoin over the recent years. On the other hand, investing in real estate has always been one of the most common methods of getting rich. To determine the benefits of investing in Bitcoin or real estate, we need to reconsider them in terms of return on investment, flexibility, and a long-term perspective.
What are the benefits of investing in Bitcoin?
More people are investing in Bitcoin as an asset nowadays. Some of the pros are:
- Small purchase: The first advantage of investing in Bitcoin instead of real estate is the possibility of small investment. Depending on your capital and balance, you can buy bitcoins at any time by visiting an online exchange. For example, some exchanges will allow you to buy even 0.002 bitcoins.
- Tax: Although some countries have tax laws for bitcoin holders, bitcoin is generally tax-free. However, it doesn’t mean that it will always be.
- Profitability: Since 2009, when Bitcoin was introduced, Bitcoin has been much more profitable than the real estate market. However, there are no rules involved in bitcoin pricing. Bitcoin market bears and whales can manipulate prices to their benefit and liquidate a tremendous amount of funds.
- Cash and online: You can sell and receive your bitcoins at any time of the day or night. However, cashing out of bitcoin is getting harder by new governmental rules around the world.
What are the benefits of investing in real estate?
Investing in real estate has been one of the most reliable investments in the past decades; let’s review some of them
- Variability: When you have a residential unit, you can use it personally or rent it.
- Tax: In general, investing in real estate exempts you from paying taxes in the real estate market.
- Get a loan: You can get a loan to buy or even repair your home. Long-term loans help boost the initial fund of investors.
- Investment Security: Investing in real estate has been one of the most lucrative investments for years. Buying a home can be a daunting task for the family, as it is less likely to fall below the purchase price.
Comparing Bitcoin and the real estate market
Bitcoin market cap is around $ 1 trillion. Having such a small market compared to real estate, which is estimated to be about $100 trillion, makes Bitcoin a more volatile asset. Bitcoin suffers from market manipulators, the so-called whales continuously manipulating the market due to the small size of the Bitcoin market cap. It seems Bitcoin has a long way to catch with the real estate market cap as of now.
Which one should I buy, Bitcoin or a house?
Bitcoin’s chart for the past 12 years displays dramatic volatility. If you are going to invest in Bitcoin, it needs to be a long-term investment. The price of Bitcoin may drop by half just days after your initial investment. Unlike buying a house and renting it, there is no annual profit investing in Bitcoin. Bitcoin’s price tops every four years due to its halving algorithm, so do not invest in bitcoin unless you are willing to hold it for at least four years.