Introduction
Cryptocurrency refers to the virtual or digital currency that is operated through the blockchain technology and uses cryptography for security. Investors buy cryptocurrencies and trade to earn profit when prices rise or hold as a long-term investment. On the other hand, real estate investment refers to the practice of buying and owning physical properties with the aim of generating income or capital appreciation. Both cryptocurrency and real estate are good investment options in today's financial world. In this post we are going to discuss some major dissimilarities between these two investment options that helps to understand their key benefits, drawbacks and risks that helps to make sound investment decision.
Key Differences Between Crypto Investment And Real Estate Investment
The major difference between crypto and real estate investment can be pointed out as follows:
1. Types Of Asset
Crypto: Cryptocurrency includes intangible or digital assets such as Bitcoin, Solana, USDC, Ethereum etc.
Real Estate: It includes physical or tangible properties such as land, residential properties, commercial properties etc.
2. Pros
Crypto Investing: The main advantages of cryptocurrency investment are:
- It is decentralized and borderless investment option
- Potential of high income in the short period
- It is 24/7 accessible
Real Estate Investing: The main advantages are:
- Investors can own the properties
- It provides tax benefits
- It can generate stable return
3. Cons
Crypto Investing: The main drawbacks of cryptocurrency are:
- It is extremely volatile so prices fluctuates dramatically in short period
- High chance of scams ad frauds
- It has no tangible value
4. Liquidity
Crypto: It is highly liquid and can be traded at anytime (24.7)
Real Estate: It is illiquid in nature and takes more time to sell properties
5. Risk Involved
Crypto Investing: It involves high level of risk because of high volatility
Real Estate Investing: It involves moderate level of risk and is more stable than crypto
6. Investment Required
Crypto Investing: It can be started with small investment
Real Estate Investing: It requires huge initial investment to start real estate business
7. Entry Barrier
Crypto Investing: It has low entry barrier as compared to real estate investing
Real Estate Investing: Because of huge upfront costs it faces high entry barrier
Crypto Investment Vs Real Estate Investment (Comparison Table)
|
Basis |
Crypto Investment |
Real Estate Investment |
|
Nature Of Assets |
Virtual/intangible |
Physical/tangible |
|
Risk Level |
Very high |
Moderate |
|
Income |
High |
Moderate/stable |
|
Entry barrier |
Low |
High |
|
Liquidity |
High |
Low |
|
Investment |
Requires less |
High investment |
|
Volatility |
High |
Stable |
Final Thought (Which Might Be Right For You?)
Both are good investment options but you can choose cryptocurrency if you can tolerate high level of risk but if you prefer stability and want to preserve your capital then real estate can be suitable for you. You can diversify your investments by adopting approach balanced (mix investment strategy ) by investing in both crypto and real estate to enjoy the benefits from both markets.
