Real estate is the largest asset class in the world. The market cap of all real estate is said to be north of $327 trillion (!) USD. Bitcoin, on the other hand, is tiny in comparison and trades at roughly $0.5 trillion USD at the time of writing.
However, many real estate investors buy real estate as a store of value to protect themselves from the inflation produced by the fiat system. However, billionaire investors such as Michael Saylor argue that Bitcoin is a far better and far more scarce store of value than real estate.
🟠 There are billions of houses but only 21 million Bitcoin — let that sink in.
|Store of Value
|Medium of Exchange
|Unit of Account
- Store of Value: Unlike real estate, Bitcoin is truly scarce — new houses can be built at will, but Bitcoin has a hard supply limit of 21 million.
- Medium of Exchange: Bitcoin can be transferred easily whereas real estate is highly illiquid and has significant friction costs when sold.
- Unit of Account: Bitcoin provides a full ledger system that has perfect predictability and, thereby, it is a much better unit of account than houses.
In this post, I’ll explore Bitcoin’s most crucial, specific advantages over real estate. 👇
Disclaimer: While we consider every point on this list true, we are not financial advisors and this should not be considered financial advice. 😅
Reason #1 – Portability
Bitcoin can be easily transferred anywhere in the world, while real estate is limited to a specific location.
Reason #2 – Liquidity
Bitcoin can be bought and sold in an instant, while selling real estate can take months or even years.
Reason #3 – Accessibility
Bitcoin can be bought with a few clicks on a smartphone, while buying real estate requires significant capital and legal processes.
Reason #4 – Transparency
Bitcoin transactions are recorded on a public ledger, providing transparency and security, while real estate transactions can be opaque and subject to fraud.
Reason #5 – Security
Bitcoin is stored in digital wallets that can be easily secured with encryption, while real estate requires physical security measures. Nobody can take your Bitcoin without your cooperation. But many could take your real estate!
Reason #6 – Divisibility
Bitcoin can be divided into small fractions, making it more accessible to smaller investors, while real estate requires significant capital investment.
Reason #7 – Inflation hedge
Bitcoin has a limited supply, making it a good hedge against inflation, while real estate can be affected by inflation.
💡 Recommended: The Bitcoin Valuation Thesis
Reason #8 – Low transaction fees
Bitcoin transactions have lower fees than real estate transactions, which can have high closing costs.
Reason #9 – No intermediaries
Bitcoin transactions can be done peer-to-peer without intermediaries, while real estate transactions require intermediaries such as real estate agents and lawyers.
Reason #10 – Accessibility to global markets
Bitcoin can be easily traded on global markets, while real estate investment is limited to local markets. For example, Bitcoin is accessible to Nigerian farmers who cannot invest in New York prime real estate.
Reason #11 – No maintenance costs
Bitcoin does not require maintenance costs, while real estate requires ongoing maintenance and repairs.
Reason #12 – No property taxes
Bitcoin does not require property taxes, while real estate is subject to property taxes.
Reason #13 – No zoning restrictions
Bitcoin is not subject to zoning restrictions, while real estate is subject to zoning regulations.
Reason #14 – No mortgage payments
Bitcoin does not require mortgage payments, while real estate requires ongoing mortgage payments.
Reason #15 – No tenant issues
Bitcoin does not require dealing with tenant issues, while real estate investment requires dealing with tenants and property management.
Reason #16 – No depreciation
Bitcoin does not depreciate in value, while real estate can depreciate over time.
Reason #17 – No insurance costs
Bitcoin does not require insurance costs, while real estate requires insurance coverage.
Reason #18 – No legal disputes
Bitcoin transactions are irreversible, reducing the likelihood of legal disputes, while real estate transactions can be subject to legal disputes, such as property disputes and contract disputes.
Reason #19 – No inspection costs
Bitcoin does not require inspection costs, while real estate requires inspection costs before purchase.
Reason #20 – No closing costs
Bitcoin transactions do not require closing costs, while real estate transactions can have significant closing costs.
Reason #21 – No need for physical presence
Bitcoin can be bought and sold remotely, while real estate transactions often require physical presence.
Reason #22 – No need for financing
Bitcoin can be bought with cash, while real estate often requires financing through loans.
Reason #23 – No need for credit checks
Bitcoin transactions do not require credit checks, while real estate transactions often require credit checks for financing.
Reason #24 – No need for appraisals
Bitcoin transactions do not require appraisals, while real estate transactions often require appraisals before purchase.
Reason #25 – No need for property inspections
Bitcoin transactions do not require property inspections, while real estate transactions often require property inspections before purchase.
Reason #26 – No natural disaster risks
Bitcoin is not subject to natural disaster risks, while real estate can be affected by natural disasters such as floods and earthquakes.
Reason #27 – No environmental risks
Bitcoin does not have environmental risks, while real estate can be affected by environmental hazards such as pollution and toxic waste.
Reason #28 – No eminent domain risks
Bitcoin is not subject to eminent domain risks, while real estate can be subject to government seizure for public use.
Reason #29 – No zoning changes
Bitcoin is not subject to zoning changes, while real estate can be affected by changes in zoning regulations.
Reason #30 – No need for property management
Bitcoin does not require property management, while real estate investment requires property management and maintenance.
💡 Recommended: 11 Best Bitcoin Books: Your Ultimate Guide for 2023
Emily Rosemary Collins is a tech enthusiast with a strong background in computer science, always staying up-to-date with the latest trends and innovations. Apart from her love for technology, Emily enjoys exploring the great outdoors, participating in local community events, and dedicating her free time to painting and photography. Her interests and passion for personal growth make her an engaging conversationalist and a reliable source of knowledge in the ever-evolving world of technology.