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Crypto VS Real Estate: Where Should You Invest?

Investing in property has always been a good idea even though newer options of investment like cryptocurrency have been gaining traction for a while now. In this article, I am going to discuss the two forms of investment in detail. Cryptocurrency is the new black around us since it has had a significant impact on the financial industry. Bitcoin and Ethereum are all the rage now- to the point that people in my own family are always raving about the benefits of the two. So is investing in crypto a wise thing to do? Keep on reading to know more.

Crypto Currency And Real Estate

Let me give you an example about investing in crypto and the results:

  • If you had invested £200,060 into Bitcoin in 2016, it would be worth £10,163,000 today.
  • If you had invested £200,060 into Ethereum in 2016, it would be worth £33,035,900 today.

Let us not forget the day when China introduced strict policies on how its people can use cryptocurrency. Bitcoin dropped by 30 % in 24 hours. We also saw how Elon Musk’s tweet caused Bitcoin to fall so my question is, can you imagine the value of your property losing its value in 24 hours because of one tweet?

From the facts shared above, cryptocurrency seems extremely risky, you can make a huge profit yet you might end up losing most of your investment too. So, does that mean that investing in a property is a better option? I believe that purchasing property or investing in it with a partner can give you peace of mind because you have the option of selling it when the price goes up and maybe investing in something similar or better again. Buy-to-let investments have shown great potential in recent years.

 

Real Estate Pros

  1. Real estate investment is an incredible to make wealth. It basically means to purchase a property to rent or sell it to make a profit. There are several ways to invest in property such as renting out your place for residential purposes, putting it up on Airbnb, or flip homes for profit.
    You can easily diversify your portfolio beyond stocks. It is a less volatile market meaning low risk.
  2. Investing in property market is highly reassuring. Real estate is a tangible investment- you can always get your money out when you want and reinvest.
  3. Real estate investment is a sound and credible source of income. How? You can get monthly rents which you can be used to pay off the mortgage payment. Another upside to investing in real estate is that your rent will increase if inflation goes up.
  4. Real Estate grows more than the inflation rate. There are many benefits to investing in property, you can get tax write-offs to a steady cash flow but to achieve that, you need to invest in the right property.
  5. A good real estate investment is when your tenants pay your mortgage. The cash comes in easily and takes shape of equity. Your property value will increase with time with your principal mortgage amount gone. Win-win situation for you!

Crypto Currency Pros

  1. The biggest benefit of investing in crypto or digital currency is that the value of the coin will always depend on how limited supply a cryptocurrency has.
  2. Investment in cryptocurrency is simple. There is no complicated procedure for purchasing crypto. You just need a crypto wallet and a cryptocurrency exchange. Investing in bitcoin has been all the rage in recent years because of the easy procedure and blockchain technology. Blockchain based smart contracts are a source of attraction for many investors as one can limit the number of middle men in the transaction. On the other hand, real estate transactions are traditional and there is paperwork involved with banks and real estate agents.
  3. To invest in crypto, you can maintain anonymity. Cryptocurrency transactions can be anonymous and this is why many people are attracted to this form of investment. You do not need to give out your personal details and this way people will never really get to know about the worth of crypto assets.
  4. Cryptocurrencies can be used anywhere as long as the respective government allows it. You do not have to worry about currency conversion etc. This is why cryptocurrencies are very popular amongst foreign investors.

Where Should You Invest?

 I believe that choosing an investment option is generally tricky. But an investment in the real estate industry has several benefits, it is a tangible asset, you can diversify your portfolio and it is low risk. Real estate industry is stable and controlled. It is not a volatile market as compared to crypto. You will never witness sudden fluctuations in the real estate market so it is long term investment and short dips won’t make really make a difference to it.

On the other hand, crypto is high risk. Buying cryptocurrency can bring you massive profits in a short period of time but so can gambling. You can never really take your money out or make a steady income. So those of you who are interested in buying and selling crypto- it is a roller coaster ride and enjoy it if you like the risk involved. I feel that property is something you can touch and feel it, it is reassuring to have invested in a building with a roof. Plus, you can always live in it yourself or sell it whenever you want.