There is a growing case to be made for Bitcoin as a store of value, says Leon Vonkem in his book ‘Digital Real Estate’. The author contends that BTC is on the verge of overtaking real estate as the means of choice for wealth preservation, a move that would upend established investment practices.
Shifting Trends Since 1971: Real Estate’s Dominance
Vonkem traces the current dominance of property back to 1971 and the U.S. leaving the gold standard. With fiat inflation running its course, real estate became the go-to for protecting one’s assets, and for decades investors have relied on it to hedge against the devaluation of money. But those dynamics are changing. Higher interest rates and inflation are dampening the market for real estate, and under such economic strain, traditional property is not what it used to be for many investors seeking an alternative.
Bitcoin’s Unique Advantages Over Real Estate
Vonkem sees a number of advantages in Bitcoin as a store of value when compared to real estate. The most prominent is its absolute scarcity; with a supply that is fixed and unchangeable, it is the antithesis of what one finds in the perpetually expanding real estate sector. In his view, that very quality should allow the purchasing power of BTC holders to grow at a more rapid pace than for those with property.
Then there is the matter of convenience. Vonkem points to the digital form of the currency as affording a level of flexibility and ease of transfer that is hard to match. It is becoming an asset of choice for many as traditional avenues of investment become more difficult to navigate.
The Evolving Relationship Between Bitcoin and Real Estate
At the crossroads of Bitcoin and the property sector, new trends are emerging. Vonkem points to the US as a case in point, where the idea of putting up Bitcoin as mortgage collateral is under consideration. Such an approach has the potential to alter the way one views and finances real estate, paving the way for lending backed by crypto.
There is also the matter of Bitcoin mining being incorporated into real estate ventures. This expansion presents an opportunity to reduce energy expenses while at the same time producing extra income. For the property owner, it means a new source of value for their investment in the form of BTC revenue.
Institutional Moves: Grant Cardone’s Adoption of Bitcoin
Vonkem points to a trend that is drawing in some of the bigger names. Take Grant Cardone for instance; the real estate magnate has begun to include Bitcoin in his investment funds. In the eyes of institutional investors, it is an indication of the currency’s increasing standing as a store of value.
There is also the possibility, as Vonkem sees it, that Cardone will set an example for other major property investors to follow and diversify into BTC. Such a move would only hasten the transition from the more conventional to the digital when it comes to preserving value.
This article reflects the channel author’s opinion and is not investment advice.
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