For many investors, ‘Cryptocurrency’ was expected to replace conventional investment portfolios for over a decade. The tangible assets in the market will be on the backburner. The latest slump in the value of Bitcoin has hit almost every cryptocurrency that was ballooning for months, sending shockwaves to many and setting a negative trend that has propelled investors to rethink investing in crypto.
Graana.com, through this blog, highlights why real estate investment is a more viable option than bitcoin.
Why Invest in Real Estate?
Instead of bitcoin, investment in real estate still stands as the most viable option present in the market. Unlike bitcoin, one thing uncontended about investment in real estate is that the real estate sector cannot vanish from planet earth. This factor makes it the primary reason people are always keen to invest in the real estate sector due to its tangible nature. History is a testament that immoveable property has always remained a significant recipient of investment for many due to the quick returns. Therefore, whatever the case or new trend may be, the importance of the real estate sector cannot be relegated.
Various compelling reasons put the real estate sector above bitcoin or any other cryptocurrency for investment.
Value Addition in Real Estate
One of the foremost aspects that put real estate above bitcoin is the factor of value addition.
Value addition refers to the concept in which the value of an asset can be easily increased by making minimal improvements. In this regard, real estate corresponds in the best manner to value addition.
Explaining this concept through a simple phenomenon – suppose there is vacant land with a value of its own. Suppose the landowner decides to construct a residence or a commercial building on that vacant land. In that case, it will correlate to value addition since a landowner will be taking rent from a tenant or he will be running a commercial enterprise. Airbnb models are the best example of value addition in real estate.
In contrast to this, the value addition in bitcoin is minimal. Most of the time, cryptocurrency investment is based on speculations, and their exchange rate is continuously oscillating.
Low Volatility
Bitcoin or digital currency is marked by high volatility, which means that the chances of depreciation in the values are more than continuously oscillating in low volatile markets. Financial Times published an article, ‘Bitcoin: Too Good to Miss or a Bubble Ready to Burst’, in which the readers were given various tips before investing in Bitcoin. The article mentioned that the basic rule before investing in real estate is that one should be ready to lose all their investment. The article was published after incorporating inputs from the crypto specialist.
On the other hand, immovable properties or the real estate sector are resilient to external shocks, thus becoming a more secure and viable investment option. The fluctuation in the prices of a cryptocurrency is observed every second, while real estate is less susceptible to changes in the market. Therefore, low volatility in prices makes real estate the most viable option.
Real Estate is a Tangible Asset
Tangible assets hold priority while exploring various investment options. One of the foremost reasons people invest in real support is that they are more resilient to external economic shocks. Furthermore, the actual assets also act as a security to be sold quickly in the market in times of economic uncertainty. Owing to the substantial nature, investors prefer real estate over bitcoin. Value diversification is another important feature that puts real estate ahead of bitcoin. The recent slump in the value of bitcoin has revealed the nature of intangible assets.
Regulated by Government
The government regulates real estate, making it easy to challenge any malpractice in the courts or other governmental platforms for redressal. Tangible assets are always under the protection of government authorities which gives a secured option for investment. Since the government authorises land for commercial or residential use, investors for investment like to invest in real estate for secured business. Similarly, the parties sign affidavits that guarantee transactions’ credibility and can be held accountable if proven fake or wrong.
On the other hand, bitcoin transactions are peer-peer which means that there is no involvement of third-party in the transactions. This implies that any fraud or malpractice while making a continuously oscillating investment in cryptocurrency or bitcoin cannot be held accountable.
Salam o Alacum.
Being an Urban Planner I support your thoughts.
I may refer to the famous book CITIES OF TOMORROW written by Ebenezer Howard in last century. In Britain 14 cities were constructed after inspiration from this.
The financial system was conceived by a Jew.
THE BASIC CONCEPT WAS WHEN CITIES ARE BUILT IN AGRICULTURE FIELDS THE VALUE ADDITION TAKE PLACE.THIS VALUE ADDITION IS UTILISED FOR PUBLIC BENEFITS.
In Pakistan difference is that most of value addition goes in pockets of individuals and land hoarding keeps lands under utilised. There is need to provide incentives to owners of vacant urban land holders to start activity. On this basis there can be innovative projects
How ever thank