Real estate and cryptocurrency: both are buzzwords for the millennial generation, and with good reason. As their spending power increases, younger people are seeking out investment opportunities, and there’s no better place to look than the intersection of real estate and cryptocurrency. While at the surface the two industries can seem unrelated, if you dive a bit deeper, you’ll see just how much they have in common.
Here, we’ll explore the link between cryptocurrency and real estate. Along the way, you’ll gain a better understanding of how the two can work together to diversify your investment portfolio as you build a brighter financial future.
Both Provide Investment Opportunities
Over the past year, the pandemic has disrupted traditional investment opportunities and given rise to unlikely new ones.
Supply constraints in the housing market and increased housing demand from a growing population have led to a sharp rise in U.S. home values. The Case-Shiller U.S. National Home Price index has risen by 18.6% in the past year alone, the sharpest rise since data was first collected in 1987. Clearly, the perks of investing in real estate are undeniable. As the world’s population increases and the amount of land on earth remains constant, real estate is a solid passive investment that can allow buyers to save for retirement while benefiting the local community.
Likewise, the cryptocurrency industry has seen booms of its own. In mid-October 2021, Bitcoin broke its previous all-time high, hitting a new record of $66,974. Non-fungible tokens, better known as NFTs, have also made headlines in recent months. NFTs are built with the same blockchain technology as cryptocurrency and “represent ownership of real-world items like art, video clips, music, and more,” according to Business Insider.
Cryptocurrency users can buy NFTs of all kinds through the blockchain. Popular musician Grimes sold $5.8 million of digital art through 10 NFTs earlier this year; these NFTs included clips and images produced in collaboration with her brother. The first strictly NFT digital artwork, titled “Everydays: The First 5000 Days” and created by artist Beeple, was auctioned off for a whopping $69 million around the same time.
Currently, both real estate and cryptocurrency are in high demand and show no signs of slowing down. But that doesn’t mean investors should put all their eggs in one basket. Investing diversification is highly important to provide buyers with financial stability and more regular returns, especially since cryptocurrency values rise and fall regularly. Real estate and cryptocurrency investments complement each other nicely, striking a healthy balance between market volatility and stability.
The Blockchain in Real Estate
Cryptocurrency is built using blockchain technology, which means that all transactions are confirmed and permanently recorded in a secure digital ledger. As you can imagine, the implications of blockchain technology are widespread. Blockchain can provide a secure way of storing healthcare information, carrying out financial transactions, signing contracts, and much more.
When it comes to real estate, access to decentralized transactions and secure, binding contracts are musts. Blockchain technology also helps safeguard against political and institutional instability. As a result, the landscape of real estate transactions is fast changing. In the past, buyers needed a full upfront investment to finance property purchases. Now, with the money saved on intermediaries, the introduction of smart contracts, and the possibility of fractional ownership, real estate investments are becoming more accessible to the public.
Managing the Logistics of Real Estate Investments
There are several things for potential homeowners to consider when buying a house, from the strength of their credit scores to how to budget for the big move. House-hunting is never easy and managing the finances of homebuying has historically posed a problem for buyers.
For those considering financing their new home with cryptocurrency, staying up to speed on cryptocurrency trends is another essential component of the buying process. Unpredictable cryptocurrency shifts could put your savings or future financial goals in jeopardy. Just as traditional financing requires your time and attention, so too does cryptocurrency.
Although purchasing property with cryptocurrency is far from the norm these days, its potential is massive. Secure blockchain transactions can provide transparency on the hidden costs of home buying and homeownership, from lawn maintenance to mortgage interest rates. Many cryptocurrency users are also looking to cut out the middleman and live a more self-sustainable lifestyle. That lands them in the new age of real estate: the intersection of cryptocurrency and tiny houses. If you’re interested in the decentralized ledger of blockchain, tiny homes, or shared investment opportunities, new doors are opening every day.
A Shrinking World
In today’s global economy, no two industries operate completely independently. From manufacturing and healthcare to real estate and cryptocurrency, we live in an interconnected network of people, technology, and businesses. Are you considering making your next real estate investment using Bitcoin or smart contracts? If not, perhaps you should. The two industries are becoming increasingly intertwined, and for homebuyers looking to cut costs while investing in property, cryptocurrency could be the way of the future.
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