Bitcoin vs. Real Estate: Which is the More Resilient Store of Value in Times of Crisis?
Real estate serves as the world’s most used store of value. An estimated 330T of global wealth is held in property. More recently, however, macroeconomic and geopolitical headwinds have exposed the weakness of real estate as a physical store of value. It is expensive to maintain, easy to confiscate, difficult to move or liquidate in times of crisis and easily destroyed. What do you do when war breaks out? You can’t take real estate with you. This may sound like a dystopia to you, but if you’re serious about long-term wealth management, you should consider the worst-case scenario. I don’t think a world war, in whatever form, is at all illogical. Who would have thought that there would be war in Europe?
As a digital store of value, bitcoin serves as an ideal hedge against the threat of war, confiscation or destruction. It is easily portable, divisible, durable, censorship-resistant, noncustodial and easy to move or liquidate in times of crisis. Bitcoin can be sent anywhere in the world at almost no cost. In addition, bitcoin is easy to maintain. You don’t have to worry about daily maintenance, rent or repairs and can self-custody bitcoin. All you need is a basic computer without internet access and a BIP39 Key generator — or just buy a hardware wallet for $50, to store it safely.
The auctioning off of Jewish property was popular in Nazi Germany. As you can see in the photo below, which shows a crowd in the town of Lörrach happily attending such an auction. German Jews were deliberately humiliated by having their property confiscated or destroyed. Families who secured their wealth in real estate lost everything overnight and, unfortunately, some later lost their lives. After their property had been taken from them, it was often no longer possible for them to leave Germany for financial reasons, and so they were left at the mercy of the Nazi henchmen.
This is a painful history lesson that teaches us the importance of storing wealth in a digital asset like bitcoin, which is difficult to confiscate and easy to liquidate or move in times of crisis. Nothing can stop you from taking your bitcoin with you. You are not dependent on lengthy bureaucratic processes as with real estate and do not have to worry that your bitcoin will be destroyed in the event of war.
Due to the digital nature of the Bitcoin-Network, there is no local dependency. In case you need to relocate, you can memorise 12 words, the backup (seed phrase) for your wallet, and take your bitcoin „with you“. Bitcoin is digital property that truly belongs to you. In the face of the threat of war and uncertain times, it is preferable to hold wealth in a digital asset rather than in tangible assets such as real estate, which can be easily taxed, destroyed, or confiscated. (EDITOR’S NOTE: You can learn about Border Wallets with BTCSessions https://www.youtube.com/watch?v=wHQrvCGVkTw&ab_channel=BTCSessions )
Bitcoin is the ideal store of value. Digital, fixed in supply, easy to maintain, difficult to confiscate and easy to move or liquidate. The properties of bitcoin reflect many of real estate’s value offers on top of fundamentally more secure custody, easier maintenance and most importantly the ability to take your wealth with you, whenever, wherever you need to go.
In a follow-up article, I will describe how you, as a real estate investor, can pursue strategies to accumulate bitcoin.
If you are interested in the topic of bitcoin and real estate, I can recommend the following articles of mine:
- Why every real estate investor should own bitcoin
- Why bitcoin is digital real estate
- Why bitcoin is pristine collateral for lending
- Is leveraging real estate to buy bitcoin a good idea?
- Bitcoin vs real estate: what is the better store of value?
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