What are the advantages and disadvantages of investing in Bitcoin over real estate?
Bitcoin, and cryptocurrency as a whole, has added another avenue for investing. To help you with deciding between investing in Bitcoin or real estate, we ask finance experts and home buying specialists this question for their best insights. From low barriers to entry to higher security concerns, there are several pieces of advice that may help you decide whether you want to invest in Bitcoin over real estate.
Here are nine advantages and disadvantages to Bitcoin:
- Lower Maintenance
- Lack of Inherent Value
- Lower Risk for Inflation
- Shortfall in Stability with High Potential
- Potential for Scams
- Ability to Trade Internationally
- Increased Energy Costs for Mining
- Lower Barrier to Entry
- Higher Security Concerns
One of the significant advantages of investing in Bitcoin over real estate is the zero maintenance cost attached. Unlike in real estate, you would have to pay for maintenance on the property to keep it valuable. But, with Bitcoin, there are no maintenance fees attached to keeping your investment running. However, the disadvantage of investing in bitcoin instead of real estate is that it is highly volatile and it is not a stable investment. But, with real estate investment, you can regularly expect the property’s value to appreciate and get regular returns in the form of rent.
Adam Garcia, The Stock Dork
Lack of Inherent Value
An advantage of investing in Bitcoin over real estate is that Bitcoin is much faster to liquidate. You can sell Bitcoin on an exchange in a couple of hours, whereas a home takes weeks, if not months, to sell. A disadvantage of investing in Bitcoin over real estate is Bitcoin has no inherent value meaning the price could drop to zero. With real estate, the value fluctuates depending on the market but still has some inherent value.
Andy Kolodgie, The House Guys
Lower Risk for Inflation
There are several types of cryptocurrencies and bitcoin is only one of them. So far, bitcoin is not affected by inflation because of its limited availability. Normally, crypto investors cash in their profits by buying real estate. Therefore, you can take advantage of this situation to build
your wealth. Hire a CPA because bitcoin’s complicated tax situation is a deal-breaker.
Francisco Remolino, Remolino And Associates- Licensed Insolvency Trustee
Shortfall in Stability with High Potential
One major advantage of investing in Bitcoin over real estate is the potential of exponential returns within a short time period when the price of Bitcoin shoots up. However, this market volatility is a double-edged sword. The value of Bitcoin can plummet without notice at any instant, which could result in hefty losses for the investor.
Carol Tompkins, AccountsPortal
Potential for Scams
The disadvantage that can be faced is the disclosure of Bitcoin-related scams and fraud. It has a massive share of fraud, scams, and threats. These vary from small-time Ponzi schemes, such as Bitcoin Savings & Trust, to bigger threats like the violation of Sheep Marketplace. These issues are dealt with by law and enforcement agencies when local payment platforms are connected.
Caroline Lee, CocoSign
Ability to Trade Internationally
The advantage of investing in Bitcoin over real estate is that it can be traded anywhere, anytime. When you own Bitcoin, the guy in the UK or retiree in Australia can be the next person you exchange your BTC with. However, you cannot sell the property to someone other than willing to buy it in your neighborhood.
Altay Gursel, Metriculum
Increased Energy Cost for Mining
One disadvantage is that Bitcoin facilitates illicit markets and has huge energy costs and so there is some danger of governments regulating its sale in the more distant rather than close future. Real estate is very stable and easy is a sleep-easy-at-night asset. Other than 2008, most of the time real estate values stay flat or go up a little higher than inflation
Cameron Fen, AI Capital Research
Lower Barrier to Entry
One of the biggest advantages of bitcoin investing is that the currency can never be inflated and there will only be a finite number of bitcoins accessible. Purchasing the currency also doesn’t require much effort. You get your cryptocurrency wallet, buy bitcoin, and start mining.
Cryptocurrency is a digital currency that can be conveniently traded on a cryptocurrency exchange.
Miklos Zoltan, PrivacyAffairs
Higher Security Concerns
One con to investing in Bitcoin over real estate is that Bitcoin comes with a higher security risk. All of the information that lets you access your Bitcoin is stored digitally. All someone would have to do is acquire your security key, and they could hack into your account. There’s been a rise in cybercrime surrounding cryptocurrency, so it is something to be aware of before you sink a lot of investment into it.
Ann Martin, CreditDonkey