Bitcoin Vs. Real Estate: Which Investment Makes More Sense For You?

Whether you're a novice investor or you've been investing for a long time, you need to determine which type of investor you are, a risk-taker or more conservative. This decision will largely determine your investment path. Real estate is a conservative avenue, whereas tech investments like Bitcoin are more volatile and riskier.

Let's Take A Look At Bitcoin

What Is Bitcoin?

Bitcoin is a cryptocurrency that began in 2009 and is the product of open-source software. It's one of the most volatile cryptocurrencies, and its valuation has fluctuated dramatically since its introduction, from a low of $1,242 in November 2013 to a high of $64,863 on April 14, 2021.

How Are Bitcoins Created?

Bitcoins are created through a process known as mining, which occurs through blockchain analysis, and their supply is finite. They're created by solving complex computer puzzles, so unlike traditional currency that can be infinitely printed or made, Bitcoins are finite in number with a 21-million-coin hard limit. More than 18 million have already been mined, and opponents of Bitcoin complain about their carbon footprint. They're now considered more of a hedge against a falling dollar than a viable, alternate form of currency.

Who Are Bitcoin's Competitors?

Those who want to invest in Bitcoin have other cryptocurrency options such as Ethereum, Microsoft Azure, Oracle, and others. Cryptocurrencies are relatively new types of investments and are therefore riskier than more conservative investments such as real estate.

What Are The Advantages Of Investing In Bitcoin?

Cryptocurrencies such as Bitcoin aren't subject to inflation like traditional cash since they're technological currency. They're also more liquid, which is important for some investors, and cryptocurrency is global, so you don't worry about the exchange rate. The value is the same in any country in the world, and it's easy to trade. Apart from monitoring its value, it's a relatively hands-off investment with great long-term potential.

What Are The Disadvantages Of Investing In Bitcoin?

Since Bitcoin is digital, it's vulnerable to cyber attacks, and security may be more difficult than with other types of investments. Since Bitcoin is so volatile, investors risk losing their entire investment. However, this is true of any investment: The greater the risk, the higher the return. Some analysts predict that Bitcoin could reach $100,000 or higher within a few years.

Let's Take A Look At Real Estate

What Are The Advantages Of Investing In Real Estate?

Unlike Bitcoin or other cryptocurrencies, real estate investing is usually considered to be very conservative. Although land values fluctuate periodically, an investment in real estate isn't usually a loss. Rental properties provide monthly cash flow, there's a variety of investment types to consider in both the commercial and residential markets, and it's a tangible asset. It can be considered a long-term investment, but sometimes, circumstances will drive up the value of a piece of property, and a substantial profit can be made within a very short time.

The Bottom Line...

There is no right or wrong type of investment for anyone. The best type of investment is that one that feels right, which is determined to a great extent by the risk factor. Those who dislike taking risks should probably consider real estate.

Are You Looking For Homes For Sale In Kansas City?

If you've decided to invest in residential real estate and you're considering homes for sale in Kansas City, then call our real estate office and speak to one of our real estate investment specialists. Any real estate purchase is actually an investment, whether it's for your residence, your business, or a rental property, and we can help you find the best value for your money. Call us today. We look forward to speaking with you.