If you search for bitcoin investments on the internet, you will find thousands of articles and blog posts.
It’s just ten years, and the popularity of bitcoin has dramatically increased.
Is there any valid reason behind it? Well, we will understand it in this article.
Along with that, we will compare it with the safe-haven asset gold and also with real estate.
Overall we will look at the three investment options and decide which is better.
Comparison of Bitcoin, Gold, and Real Estate
Well, you will find some similarities between gold and bitcoin, but real estate is a little different from these two.
Now let us understand one by one, and finally, we will compare these three.
Bitcoin as Investment
First of all, it’s crucial to understand what bitcoin is.
As the most fundamental principle of investing says, understand an investment opportunity before you put your money. So we will start with the basics of bitcoin.
Bitcoin is a digital currency created by a pseudo-anonymous name Satoshi Nakamoto to deal with the traditional financial system’s drawbacks.
Many experts proposed many theories about the most-valued digital currency’s creator, but it’s still a mystery.
Although bitcoin’s purpose was to solve the problems related to financial drawbacks, people made it one of the world’s best investment assets.
It set a record by returning more than 62000 percent as an investment asset only in ten years.
Thus, the number of people in the bitcoin space is growing at a rapid rate.
These are the following reasons why most people consider it as one of the best investment assets.
- High Returns
- Adoption of Bitcoin Across the World
- Government Cannot Manipulate the Value of Bitcoin
If you want to know about different bitcoin trading and investing strategies, bitcoin wallets, exchanges, then visit the official website. However, bitcoin involves many risks such as high volatility, uncertainty, and some security risks.
Gold as an Investment
From ancient times, people had been investing in gold as a safe-haven asset.
Gold proved it in the past during an economic downturn or financial instability in the economy.
Many investors hold more than 10% gold in their portfolio, and more importantly, many people invest heavily in gold during a market crash.
Here are the following reasons why people invest in gold.
- Store of Value
- Hedging Against Inflation
- Safe-Haven Asset
- Increasing Demand
- Portfolio Diversification
Although gold is one of the best investment options, there are some disadvantages of investing in gold, i.e., gold can be volatile on a short-term basis.
Real estate is also a great investment option. Many people find it difficult to understand how to invest in real estate.
The main reason is due to agents and brokers; many people don’t want to deal with them.
But there are easy ways to invest in real estate such as REITs where you will directly get the shares of real estate trusts at major stock exchanges.
Anyway, people who take more-risks and directly invest in real-estate get some potential benefits such as tax benefits, good returns, and predictable cash flow.
Now let’s know the reasons why people want to invest in real estate.
- Predictable Cash Flow
- Portfolio Diversification
- Tax Advantages
- Rental Incomes
- Leverage for Properties
Despite all the potential benefits, one of the major drawbacks of real estate investment is the lack of liquidity. So you can’t sell your real-estate property instantly.
Now, which is the better investment option?
If you compare them in terms of risk, gold is the better option then real estate then bitcoin.
Whereas if you compare them in terms of return, bitcoin comes first, then real estate and gold.
Overall my advice would be to invest more in real estate than on gold than bitcoin.
After all, it entirely depends on how much risk you can take and what your investment goals are.
Once you are clear with these two, you can easily decide which investment option is best for you.
Hopefully, the article has helped you understand the better investment option among gold, real estate, and bitcoin.
Please share your opinion on this and what would you suggest for these three investment options, mention below.