If you want to watch your money increase, especially without having to work for every cent, you should put it in the right place. People new to investing or who want to branch out from their traditional tactics may be unsure which field to pursue. While conventional investments such as equities and real estate are still available, modern investors have access to cryptocurrencies.
Crypto investment often allows greater ROI than traditional investments, however, the crypto market is volatile and there is a higher chance of losing your money to sudden dips. Real estate often presents a more stable form of investment; but has a tight market entry. Let’s explore crypto and real estate investments.
Real Estate Investment
Property is a tangible and valuable asset, where you can make money through rent, lease, and sale. Real estate investment is multi-faceted; you may flip houses, rent commercial spaces, or vacation properties. You can also buy a property to sell for profit in the future.
- Excellent passive income source
- High cash flow from rent
- Long-term returns
- It is not a fluid asset so you cannot sell a property anytime you want.
- Property investment requires heavy capital.
- Maintenance fees, including upgrade, repairs, and upkeeps add to the cost of managing a real estate property.
- It is expensive to maintain
A cryptocurrency is a digital currency transacted over the internet and built on a Blockchain. Satoshi Nakamoto built Blockchain technology and the first crypto, Bitcoin, in 2019. Today, Bitcoin has the 8th largest market cap of all companies in the world. Cryptocurrencies are volatile, but they present an opportunity to make a lot of money. In 2012, the average price of a Bitcoin was $5.27. In 2022, almost a decade later, a Bitcoin averages at $51,190.
According to Finance Yahoo, most early adopters of cryptocurrency (people who invested in the early of crypto) have enjoyed more than 20,000,000% cumulative gains since 2011. With NFTs, play-to-earn games, and exchanges allowing investors to short sell or leverage, crypto is still a valid way to make a lot of money.
- It’s easy to trade
- Cryptocurrency has an unimaginable earning potential for short and long-term investment.
- It has a high long-term earning potential
- It is low maintenance: Trading fees and investment fees are very low, compared to real estate.
- Easy Market Entry: With as low as $2, you can start investing in cryptos.
- It isn’t a physical asset
- It is high risk
- It has little/no government involvement; hence, there are no guarantees of getting your money if the network is hacked.
Cryptocurrency and real estate investment are two distinct investment options. The smart investor diversifies his portfolios (invests some in real estate and some in crypto). The greatest strength of real estate is its passivity (you can earn money from rent in your sleep). For cryptocurrency, the easy market entry is a plus. For example, Coinbase, one of the biggest and most popular crypto exchanges in the world, accepts a minimum of $2 for investment. With only $2, Coinbase allows you to actively trade and make money from crypto.
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