• Sun. Nov 27th, 2022

Investing in Cryptocurrency or Real Estate?

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There have been lots of talks about cryptocurrencies. The interest in learning how it works has surged in recent years. For investors, it has been a rollercoaster. There are periods when the market is bullish, sometimes it becomes bearish. Market fluctuation is inevitable in that space.

A cryptocurrency worth $1000 can drop to $5 in a few minutes. It can also rise from $1000 to $20000. This is common in the crypto space. As an investor, it is good to be prepared psychologically to deal with losses. The caveat here is usually “do not invest all your money in buying crypto” or the money you cannot afford to lose.

Just a reminder to the newbies, there are a few exchanges where you can buy or sell your cryptocurrencies. These exchanges also allow you to store your assets there. It’s important to research the exchange that fits your purpose in terms of security, flexibility in registration, and other factors.

However, investing in real estate is ancient. It is not a new phenomenon like cryptocurrency. Past generations or those who acquired wealth all invested in real estate. In fact, the most common financial advice is investing in real estate. It’s a piece of financial advice that even an illiterate can give to anybody. You buy land today with the hope of reselling it tomorrow at a higher price.

Now the big question is, would you invest in crypto or real estate? In other words, would you use your money to buy a coin like Bitcoin, Litecoin, or Ethereum or buy land?

Risks

Buying land or property can be a very difficult decision to make. There are a few things to consider, the location, environment, neighborhood, security, accessibility, land mass, etc.

The process involved in buying a property is rigorous and takes weeks or even to be concluded. The paperwork, legal procedures, settlements, etc. This is not the same as buying a coin.

In 15 minutes you are done buying a coin worth millions. You log in to your Binance, locate the P2P (Peer to Peer) market, identify the seller of the coin, then transfer the money. It’s as simple as that.

There is also a narrative that buying land is more secure than buying a coin. That is not entirely true. There are cases where the same land sold to you is sold to another person or persons. This is common in Nigeria.

“I know a man who bought land from the owners; all the papers were completed and he went ahead to build and moved into it, only to receive a letter from the government saying he should vacate the house as his house has been marked for demolition,” Chuks Ibe, Lead Consultant at Estate Homes and Properties, said in a note.

Cryptocurrencies
Source: Nigeriapropertycentre.com

“He couldn’t believe his ears, according to the letter he was building what is not allowed in that area. The government had already marked that area as an industrial area. So building a residential home was not accepted.”

You don’t experience this when you invest in buying a coin. The only caveat here is that your login details, such as your password, must be secured. If you lose your login details, you lose your investments.

There are also fears of what happens to your assets when crypto exchange no longer exists or crashes. Land can be seen and even touched. This is not the same with cryptocurrencies. The issue of trust is recurrent.

RoI

Hoping to get rich quickly is never a good motivation for investing. No investment comes with guaranteed returns. Although, some investors made big bets years ago and earned millions of Dollars in returns.

Tola Fadugbagbe, Founder, Crypto Master Class who has been at the forefront of educating Nigerians through his content on social media, believes that investing in real estate offers less than the value of returns on crypto (Bitcoin) investment.

“If you bought $1 worth of Bitcoin five years ago, you’d be worth over $100,00 today. Which real estate investment will offer you that?”

Bitcoin has seen more volatility than almost any other market. But it has offered a 14,000 percent growth rate for at least 5 years. Real estate investment in 10 years will not offer you a 1000 percent growth rate.

Crytocurrencies

The volatility is nothing new and is a big reason experts say new crypto investors should be extremely cautious when allocating part of their portfolio to cryptocurrency.

However, it is important to note that the Nigerian real estate sector is growing at a rate of 8.7 percent, which is faster than the average GDP growth rate of 7.4 percent, according to a new report by accounting and auditing firm PricewaterhouseCoopers (PwC).

Conclusion

Anyone who wants to invest in cryptocurrency should first acquire knowledge and understand how the market works. The psychology of trading or investing in crypto is also important. These skills give you the confidence to enter the market and explore.

Investing in crypto will always be better than real estate in the long run.

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