Cryptocurrency Or Real Estate? What Should You Invest In?

By Krasimir Hristov

Cryptocurrencies are gaining more and more popularity among investors from literally all walks of life. It is very easy to understand why since we are talking about a speculative opportunity that can easily lead to huge gains. It is enough to highlight the fact that 1 BTC was $1,000 in March 2017. Then, in December 2017 it actually reached a value close to $20,000.

While cryptocurrencies offer a huge earning potential, we cannot neglect the fact that the risk associated with investing in digital coins is very high. Due to this, many investors still look at tried and tested opportunities, like real estate properties.

For a long time now, real estate has been seen as being the gold standard with investing. Home value tends to appreciate as time passes and the real estate owner can actually make a passive income when he/she rents the property. Overall, we have to acknowledge the fact that property purchasing is seen as a safer investment. However, there are also risks associated with it. This is why choosing between cryptocurrency and real estate is not as easy as you might first think.

Cryptocurrency Investments

One of the most important things we have to highlight is that cryptocurrency technology is very complex. However, investing in crypto coins is quite simple.

Generally speaking, all that you have to do is to sign up for one of the large and safe cryptocurrency exchanges. Then, you buy cryptocurrency like Bitcoin or Ethereum.

A big problem with making crypto investments is that you will be faced with countless opportunities. There are countless crypto coins that you can consider so deciding what to put your money into can be tricky.

As with many other industries, we constantly see people that try to sell some very risky investments. There are also numerous scams that keep popping up from time to time.

As a beginner, when you want to invest in cryptocurrency, the most important thing is research. You should only buy and hold a currency that you learned a lot about and that you are sure is secure. The safest investment options at the moment, according to specialists, are Bitcoin, Ethereum, and Litecoin.

Real Estate Investments

The volatility of real estate investments is so much smaller than what we see with cryptocurrencies. There are definitely some risks that exist but fluctuations in value are simply fewer. While it is completely normal for BTC to drop in value, let’s say 10%, in just one night, this does not happen with real estate properties.

The big problem with real estate investments is that the upfront investment necessary is a lot higher than with crypto investments. As an example, one Litecoin can be bought for $60 (at press time). The medium home value in the US is $247,084 (data released in April, 2020). This practically means that your starting capital for real estate investments in the US is around $30,000.

What is particularly interesting is that real estate is highly documented and one of the tried and true strategies used by millionaires for years. In fact, during the past 200 years, most millionaires got their wealth through smart real estate investments.

Should You Invest In Cryptocurrencies Or Real Estate?

One of the very first things you learn about making an investment is that you have to diversify your portfolio. This practically means that you need to make several investments with the budget that you have. You thus protect your assets in the long run. Generally, for beginners, it is recommended to include various assets in their investment portfolio, like index funds, stocks, bonds, cryptocurrencies, and real estate properties.

Now, before you make any major investment, it is a very good idea to talk to a financial advisor or you should at least conduct a very good research. Consider the small amount of information presented here as being just your first step.

Simply put, you can invest in cryptocurrencies when your budget is limited. However, if you have more money and you have a problem with the high risk associated with digital coins, it is simply better to consider real estate investments.

The last thing that should be highlighted is that you can always invest in both, in the event that you have the money needed for this. While a large part of your budget is put into real estate, you can make good money with cryptocurrencies. Just make sure that you also set some money aside for other investment opportunities so that you can diversify your portfolio, as already mentioned.