Invest in real estate or cryptocurrency - let's decide together
Since the beginning of the pandemic, more and more people became interested in different possibilities of preserving their capital in such a turbulent time. Many of you will say that the best investment is to invest in your own business. However, what else can we do when companies are closing for obvious reasons, and many directions of business are in danger?
Obviously, it is worth thinking about investing in something that could bring a stable income but would not require a lot of time and additional qualification. This will allow you not to be distracted from your main activity and have confidence in the future. Today, probably, everyone has heard such an expression as cryptocurrency. It is a payment system that runs on the blockchain. To describe in simple words, this is a virtual method of transferring information, which passes between two sides and, unlike traditional currencies, is carried out without intermediaries in the form of banks. Also, cryptocurrencies are not regulated by the central banks, and their exchange rate is only based on supply and demand. Moreover, crypto currencies are not official currencies and are not required to be accepted as payment for goods and services.
Having figured out what a cryptocurrency is, let's look at its most successful representative - Bitcoin. Although Bitcoin was first introduced in 2009, it has only gained popularity in the past few years. The creator of Bitcoin is still unknown. In 2016, 1 bitcoin could be bought for less than $ 500, and already in 2017, its value approached $ 20,000. But not for a long period of time. In December 2018, its price dropped to $ 3,000. Bitcoin peaked on April 13 of 2021, exceeding the $ 63,000. Today (04/25/2020) it can be purchased for $ 48,000. In less than 2 weeks, it lost a quarter of its value. As you can see, the bitcoin rate is very unstable and, obviously, it is very difficult to predict the direction of its further development.
If we compare investments in real estate in the Czech Republic and in Bitcoin, then we can conclude that their ideas are radically different. Real estate is a more reliable asset that is not affected by price fluctuations. Its annual growth is stable. In 2020, when the pandemic was announced, the average cost of apartments in the Czech Republic increased by 10%, and since 2014 by 84%. In addition to this growth, it is worth adding the income received from the rent of real estate, which is at least 3% per annum. The owner of real estate is protected by law, the real estate market is regulated by the state and there are legal rules covering all aspects in this area. Also, an investor can easily and quickly sell an apartment because the demand for real estate in the Czech Republic is very high, and today mortgages are provided at record low interest rates. It is also important to add, that it is a real asset, and you can live in it by yourself or give it to your relatives. Cryptocurrency investments are not transparent at all. There are no legal norms that could resolve possible disputes, it is difficult to predict how the course will change. Bitcoin may not be accepted for payment, and such sharp ups and downs can lead to a nervous breakdown. Moreover, it is obvious that the bank will not issue a loan for investment in cryptocurrency. For those who love risk and are not afraid of a sudden loss of everything, Bitcoin can be an interesting asset. But for investors who need a stable income and confidence in the future, real estate clearly looks preferable. Everyone must decide for themselves which strategy choose when we are talking about the investment. It would be appropriate to add an amazing quote of the great American writer Mark Twain "Buy land, they're not making it anymore ".