Bitcoin vs real estate

 For much of the past 10 years, Bitcoin has dominated the discussion about alternative investments. It's not difficult to understand why. Bitcoin is a dream come true in terms of its ability to generate press and make both casual and experienced investors make big bets on it. Many investors hailed bitcoin as the currency of the future and cleared their portfolios to invest everything in bitcoin.

They looked like geniuses when Bitcoin hit an all-time high near $68,000 in November 2021. Unfortunately, anyone who didn't jump on the bitcoin bandwagon in November learned the hard way that bitcoin is as volatile as it is lucrative. Bitcoin has been in freefall this year and has struggled to recover. All of this begs the question of whether a year ago you would have been better off investing $10,000 in real estate or Bitcoin.

Bitcoin vom 2. January 2021 bis zum 21. July 2022

To assess whether $10,000 in Bitcoin or a $10,000 real estate investment was a better idea, compare. A single bitcoin traded at $29,405 on January 2, 2021. That means an investment of $10,000 could have bought 0.34 bitcoin, or a little less than a third of a coin. Bitcoin posted strong gains for most of 2021. In fact, it surpassed its own all-time high several times during the year. It peaked at $67,553.95 in November 2021. Needless to say, Bitcoin investors were dancing in the streets. Many of them used their profits to reinvest in Bitcoin.

In their defense, reinvesting in a high-performing offering isn't the least bit controversial. Many investors use this strategy, both in traditional and alternative investments. But as the old saying goes, "What goes up must come down". Not long after Bitcoin peaked, the first signs of inflation began to weigh on the economy, and then the Federal Reserve began hinting at rate hikes.

That was when the descent began. Since then, bitcoin has basically stagnated, dipping below $20,000 before recovering slightly to regain its current level of $21,536. That means the $10,000 (or 0.29405) of bitcoin you bought last January is now worth around $6,332. In other words, you would have a loss of about 37% on your original investment.

A $10,000 real estate investment from last January 2021 to now

Let's imagine for a moment that you are a less adventurous alternative investor who decided to put your money in something other than the stock market in January 2021 with $10,000. So, instead of bitcoin, you've decided to invest your $10,000 in the Flagship Real Estate Fund.

The Flagship Real Estate Fund works like a normal investment because since it is not a cryptocurrency, you do not convert your investment capital into another monetary unit. The fund itself is an untraded real estate investment trust (REIT) whose stated aim is to provide investors with passive income while allowing them to benefit from appreciation in the value of the assets in the fund. Flagship consists of a diversified mix of core-plus, fixed income and opportunistic holdings across the following real estate sectors:

• Rented single-family homes
• Development of apartment buildings
• Commercial Real Estate

Based on the fund's historical performance data, your investment of $10,000 in January 2021 would be worth $13,550 at the end of July 2022. In other words, you would get over 35% more than your initial investment. While that's not as high as Bitcoin at its peak, $13,550 is 66% more than the $8,100 you would have if you had invested your $10,000 in Bitcoin rather than the Flagship Fund a year and a half ago.

One of the cases of the tortoise and the hare

REITs like the Flagship Fund may not be as enticing as cryptocurrency Bitcoin, but a 30% gain outpaces a 19% loss any day of the week. This example is a classic case of turtle versus rabbit. Bitcoin sprinted to the top while the flagship fund posted slow and steady returns, but at the end of the race it was the flagship fund that prevailed. timing is everything.

If you dumped your bitcoin at the November peak, you would have earned over 600% of your original investment. If you were waiting for another record high, you would have paid a heavy price. So if you're looking to put some capital into an alternative investment, know that real estate is still a proven winner that can generate impressive returns. Furthermore, real estate prices continue to rise. An end doesn't seem in sight at the moment. Overall, the development of the real estate market is difficult to forecast, since various, sometimes contradictory, components are at work here. Nevertheless, the first indicators suggest that there are currently signs of a trend reversal on the real estate market. The first observations show, for example, that the ECB's interest rate hike against inflation will lead to a rise in lending rates in the real estate sector. This makes it more and more difficult and therefore more expensive than before to pay for a property.

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