Saturday, March 25

Cryptocurrency Vs Real Estate Investment: Pros & Cons

The most common investments that can fetch you a lot are Cryptocurrency and Real estate. So, when you mention investment, these are the two that easily come to mind. Over the years, both Cryptocurrency and Real estate investment have proven to be worthy choices. Meanwhile, this is not to say that each doesn’t have advantages and disadvantages. However, if you are perplexed about where to put your money, you may seek the assistance of your financial advisor.

Let’s talk about real estate. People consider cryptocurrency versus real estate investment because they are both forms of investment that offer potential returns. However, they differ in terms of their characteristics, risks, and benefits.

Cryptocurrency is a digital asset that operates on decentralized networks and uses cryptography to secure transactions. It is highly volatile but offers the potential for high returns. Real estate, on the other hand, is a tangible asset that is typically less volatile and offers potential for both rental income and capital appreciation.

Cryptocurrency Vs Real Estate Investment

It is also subject to various taxes and regulations. Investors must weigh the pros and cons of each option and consider their individual financial goals, risk tolerance, and investment strategy when deciding between cryptocurrency and real estate investment.

What is real estate investment?

Real estate investment refers to the purchase, ownership, management, rental, and/or sale of real property for profit whether immediately or in the long run. This can be in the form of residential or commercial properties, such as

  • Apartments
  • Houses
  • Office buildings
  • Retail spaces
  • Industrial sites

The goal of real estate investment is to generate income through rental income, appreciation, or selling the property at a higher price than what was originally paid for it.

Pros of Real Estate Investment

  • Steady cash flow: If you deal with rental or land flipping, you should be smiling at the bank all the time because you keep having cash flow all round year.
  • Long-term security: Real estate promises safety for a long time. If you bought your property from a reputable company and your property is not built in a way that may obstruct future development, hence demolishing, then you should rest assured of long-term security.
  • Protection against inflation: This is not a big concern for you. Once your property is working for you, then, the effects of inflation on you are highly minimal.
  • Appreciation: Property hardly depreciates. As the year goes by, it keeps appreciating and whatever decision, in terms of reselling the property, is such a profitable one at the end of the day.
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Cons of Real Estate Investment

  • High maintenance: Building a structure is not as expensive as maintaining it. You could spend a fortune on maintenance, especially if a part of the house is not properly fixed, for instance, the plumbing aspect.
  • Capital insensitive: Real estate requires a lot of money, so you have to be financially ready before you begin.

What is Cryptocurrency Investment?

Cryptocurrency investment refers to the purchase and ownership of virtual currencies, such as Bitcoin, Ethereum, or Ripple, with the expectation of generating a profit through future appreciation or as a medium of exchange. Cryptocurrencies are decentralized digital assets that use cryptography to secure transactions and control the creation of new units.

Cryptocurrency investments are speculative and volatile, as the value of cryptocurrencies can fluctuate greatly over short periods of time. As such, cryptocurrency investment carries a high level of risk and should only be considered by individuals who are comfortable with the potential for significant losses.

Cryptocurrency, which has bitcoin as the most famous investment option. It is backed by blockchain technology, bitcoin is touted as an immutable currency. These digital currencies act as a medium of exchange globally as an alternative to money.

The cryptocurrency had its tremendous run in 2021, with bitcoin hitting all-time highs of around $68, 000 in November. Bitcoin is indeed the attention it deserves. As more people set their eyes on digital assets as another possible investment, their popularity might grow further.

Moreover, cryptocurrencies such as bitcoin have a lower entry barrier when compared to real estate. This allows the average investor who does not have a lot of capital to spare to start his investment journey.

Cryptocurrency is relatively new, there’s not enough data to calculate its value. As recent price fluctuations show, the market is volatile. In a twinkle of an eye, you could lose everything and go back to square zero. However, if you are willing to take the risk, you might be lucky.

Pros of Investing in Cryptocurrency

  • Transactional freedom: You are free to do anything without waiting for documents to seek the approval of the government.
  • Easy to trade: If you know your way around it, you can sit in the comfort of your home to trade.
  • Low maintenance: Unlike having structures to maintain, cryptocurrency does not require any sort of maintenance. Technically, your investment is virtual.
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Cons of Investing in Cryptocurrency

  • Not a tangible asset: Just like I said with the pros of cryptocurrency, it is a virtual investment and not an investment you can heavily depend on.
  • Security issues: Anything can happen. Your account can be hacked and you end up losing everything.
  • Little or no government involvement: When the government is not involved in a certain sector, it is dangerous. This means it has no law guiding it, so, whatever happens, you are solely responsible for bearing the loss.
  • High risk: There’s no certainty of what would happen in the next few minutes. It’s in two ways, “win big or lose flat out.”

Now, real estate investment and cryptocurrency investment: which investment is better

It’s difficult to determine which investment is better as it largely depends on individual investment goals, risk tolerance, and market conditions.

Real estate investment can offer stable, long-term income through rental income and the potential for appreciation. It is also a tangible asset that can be physically inspected and has a use value. However, real estate investment can also be expensive and time-consuming, and the market can be influenced by local economic conditions.

Cryptocurrency investment, on the other hand, offers the potential for rapid growth and high returns, but is also extremely volatile and carries a high level of risk. Cryptocurrencies are decentralized and not backed by any government or central authority, making them less stable than traditional investments.

Ultimately, the choice between real estate and cryptocurrency investment will depend on an individual’s financial situation, investment goals, and risk tolerance. It’s advisable to consult with a financial advisor and conduct thorough research before making any investment decisions.

Choosing which of them is better depends on how vast your knowledge is, and the risk you are willing to take. Cryptocurrency is of low maintenance but highly risky, while real estate will cost a fortune but of very low risk.

Just like they say now, “choose a struggle.”


What is the difference between cryptocurrency and real estate investment?

Cryptocurrency is a digital asset designed to work as a medium of exchange, using cryptography to secure and verify transactions. Real estate investment involves purchasing property for the purpose of earning income or capital appreciation.

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Which is more profitable, cryptocurrency or real estate investment?

It depends on the specific investment and market conditions. Both can be highly profitable but also come with risks. Cryptocurrency markets are highly volatile, while real estate can be impacted by local and national economic conditions.

Is it safe to invest in cryptocurrency?

Investing in cryptocurrency carries a high level of risk and may not be suitable for all investors. The value of cryptocurrencies can be highly volatile and can fluctuate widely in short periods of time.

Is real estate investment a safer option?

While real estate investment can be a safer option than cryptocurrency, it also involves risk. Real estate markets can be impacted by local and national economic conditions, and the value of a property can fluctuate.

Can cryptocurrency be used to invest in real estate?

Yes, it is possible to use cryptocurrency to invest in real estate. Some real estate platforms accept payment in cryptocurrency for investment in properties or real estate funds.

Is it easier to liquidate a cryptocurrency investment or a real estate investment?

It is typically easier to liquidate a cryptocurrency investment, as it can be sold on an exchange quickly. Real estate investments can take longer to sell, as the process of listing, showing, and closing a sale can take several weeks or months.

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Dennis Isong is a TOP REALTOR IN LAGOS. He Helps Nigerians in Diaspora to Own Property In Lagos Nigeria STRESS-FREE. For Questions WhatsApp/Call 2348164741041

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