Bitcoin and Real Estate: How To Become A Millionaire

My investing strategy expanded for 2021

Gold investors are worried about Bitcoin. They should be.

The problem

Nobody is storing pounds of gold over Bitcoin. Nobody is painstakingly buying up gold when purchasing Bitcoin takes less than 10 minutes. And nobody — absolutely nobody — is using gold to buy a loaf of bread or everyday goods.

Here’s the catch: If Bitcoin replaces gold as a store of value one BTC will be worth $500,000. That’s a 10X profit from today’s prices. A 10 trillion dollar MCAP.

But let’s zoom out and look at the bigger picture here. What else could Bitcoin supplant in value?

My eyes are set on real estate.

The U.S. housing is now worth $36.2 trillion. Crazy enough, real estate is the best-performing investment in modern history and continues to evolve faster than Ash’s Pikachu (Nerd joke, sorry).

If Bitcoin is to reach the fabled ONE MILLION price tag it’ll need to convert many real estate investors. This is why Bitcoin vs. real estate will be the Super Bowl matchup of the century.

Bitcoin vs Real Estate: Are They Really Similar?

No.

I can’t live inside a Bitcoin. But I can invest in one and expect better ROIs than real estate.

The main similarity between crypto and the real estate market is their similar price performance over the past decade. Both asset classes have dominated.

Despite the drastic collapse in housing prices during the 2008 financial crisis and the 2020 COVID-19 pandemic, real estate has outperformed the S&P 500 for the past few decades.

Bitcoin doesn’t have the history or value proposition that real estate does. In the case of Bitcoin, growth is stimulated by simple supply and demand economics.

Bitcoin is a hyper-deflationary asset. No more than 21,000,000 bitcoins will ever be created, with 99% of that being mined by 2035 (by then shit is going to get crazy). In other words, BTC appreciates in value because the supply is very limited and this trend is expected to continue indefinitely.

Meanwhile, although new real estate properties are constantly being developed, the housing market is constantly in short supply as well.

Demand for housing reached a fever pitch in 2021 and vastly outstripped the supply. US home prices surged 17% in May 2021, the fastest in 17 years.

However, there is a looming concern in real estate.

The Problem with the Real Estate Market

Real estate investing is a playground for the rich and well-connected.

With the exception of crowd-funding apps, real estate isn’t something average investors can get into (moreover, direct investments into real estate have much more consistent, loftier returns over crowd-funding sources like Fundrise or Yieldstreet).

The hard truth is that real estate is one of the most competitive sectors in the modern economy. Financial giants such as Berkshire Hathway, RE/MAX and Coldwell Banker are known to buy real estate properties on a massive scale. And big banks have almost full control over the market — as we saw in 2008.

Individual investors who want a new side hustle or to acquire a safe store of value have very little chance to do that on the real estate market.

Even if you manage to invest in real estate despite all these problems, you cannot ignore the human capital costs.

My grandfather owned two apartment complexes growing up. He had to hire rental agents, handymen, house cleaners, and inspectors just to maintain his property. By the time he passed away he just sold it to the banks.

Real estate isn’t just an investment, it’s a second job

Bitcoin Vs. Real Estate

Bitcoin has a few things going for it. For one, BTC’s scarcity is clear and defined. Inflation is set in code, not by humans. Nobody can manipulate the blockchain to increase the supply of Bitcoin.

What’s even more important is that Bitcoin is fully decentralized.

There is no central authority that has control over the market. This aspect of Bitcoin even protects it from the government as it’s impossible to shut down worldwide.

While BTC whales can slightly change the price in the short term, they cannot drastically impact the long-term value proposition.

Simply put, the Bitcoin market is fair and transparent. Everyone who plays, plays by the same rules. The blockchain is egalitarian. The game isn’t rigged. This is especially shown in Bitcoin’s volatility.

In volatility is fairness. There’s an opportunity for everyone to invest at lower prices insofar as they have the stomach to hold.

This isn’t to say Bitcoin is superior to real estate in every way.

Real estate is historically proven compared to Bitcoin which is only a decade old. Moreover, real estate is less volatile even during crises such as COVID-19.

The jury is still out if Bitcoin could thrive during a crisis — especially if that crisis were to take down the internet.

Historical value is a real selling point you should consider when investing in real estate, gold and Bitcoin. And if my stance wasn’t obvious, Bitcoin is the clear loser here.

Bottom Line

Bitcoin is a Ponzi scheme with no intrinsic value.

Wrong.

The intrinsic value of Bitcoin is being an immutable store of value. The intrinsic value is decentralization and no one affecting your wealth. The intrinsic value is universal money.

We’ve never in the course of human history had an immutable store of value. There was always the ability to print more money.

Not anymore.

While it’s always a good idea to diversify your portfolio, investing in real estate is a game best played by the wealthy.

I do plan on investing in real estate at some point in my life. My dream is to one day manage my own comedy club. But at this stage, I’d rather invest in something that gives value to anyone with an internet connection instead of anyone making six figures.

Can owning one Bitcoin make you a millionaire? I’d say it has a higher chance to do so than investing in real estate.

Bitcoin is for the average investor and real estate is for the aristocracy.

Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.

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