When faced with the option of investing one’s capital, an investor has many options. The latest asset class that has stolen the spotlight is bitcoin. In 2020 Bitcoin achieved a return of more than 200%. The question of whether to invest in bitcoin or real estate is a tough one to answer as each asset class has its benefits:

The case for bitcoin:

Bitcoin offers investors an opportunity to easily acquire a digital asset in any quantity and with relatively little expertise.  The asset is liquid and can be sold immediately and as has recently been witnessed returns can shoot through the roof. The downside of investing in bitcoin is that it is a risky asset, prices can plummet as fast as they rise.

The case for property:

Property is a stable, predictable, and essential asset class. Although returns may not potentially be as high as bitcoin, an astute investor can still make handsome return by actively working the asset. Bricks and mortar real estate can be leveraged and thus returns can be magnified by borrowing money from a financial institution – this is not the case for bitcoin.

As will always be the case, its is prudent to invest in multiple asset classes to diversify risk, a balanced portfolio should be heavily weighted with real estate and a portion should go towards riskier assets such as bitcoin.