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Bitcoin & Property, Where to Invest Your Money!

Aug 4, 2022

In today’s property surveying blogpost topic we are going to be discussing Property Valuation

When it comes to making an investment, property has generally been considered the way to go. However, there is a new trend where people are now debating investing in property or bitcoin.

When we look at an investment, there are several things we consider. The market volatility, future predictions, historical trends, and the risk versus return ratio. We’ve definitely all heard of the investors who happened to cash out at the right time on bitcoin, and went on to become millionaires or billionaires.

However, is bitcoin too big of a gamble, or is it becoming the safest investment out there? If you invest in bitcoin, are you going to see the same level of returns that the millionaires talk about, or his property the better bet

Let’s take a look at both property investment and bitcoin, and try and establish which one of the two is the best one. 

A Beginner’s Guide to Bitcoin

So, what is bitcoin?

Bitcoin is what we would refer to as a digital currency. It has been created electronically, it is held in the same way, and uses peer-to-peer technology. This means that one network carries out the transactions and creating and issuing of new bitcoin. 

Bitcoin is a decentralised currency, so nobody controls it, nobody owns it, and anybody can access it. Because it’s not owned by a bank it has a little more freedom in terms of how it operates. 

There are hundreds of cryptocurrencies in the world, but bitcoin is probably the most well-known. It’s definitely the one you hear about most in the news.

The Birth of Bitcoin

Bitcoin was made by a software developer named Satoshi Nakamoto.

The basic idea behind bitcoin was to build a currency that wasn’t tied to any particular authority, and was consequently transferable electronically with little to no transaction fee.

Back in July of 2010, bitcoin first began trading. At that point, it only had a value of $0.0008 and it didn’t do that well until 2013, when suddenly its value jumped up to $250, and then by the end of 2013 we were looking at $1164.

Market volatility definitely has an impact on bitcoin, as by 2015, its value had dropped to just $245. However, it was the COVID-19 pandemic that really made the value skyrocket, as in March 20 20, a single bitcoin was worth $4810. 

As of March 2021, the value of bitcoin was a staggering $56,242 for one bitcoin. That means that anybody who purchased a single bitcoin a year ago would’ve seen the value of that one coin increase by 10 times. =

Bitcoin – A Smart Investment?

So, anybody who purchased bitcoin back in 2010 would probably tell you that they have seen an incredible return on their investment, and it’s not exactly unreasonable to be jealous of that.

However, trying to predict whether or not bitcoin is an available investment is a different question altogether. The thing about currencies like this is that there is considerable excitement surrounding them, because they can have a huge payout. However, they can have just as much of a financial loss if things don’t go according to plan. 

It’s definitely hard to try and predict what the currency will do with any certainty, because it constantly shifts in terms of what it is worth and how much it will go for. Furthermore, in what is a very short lifespan, bitcoin has seen some pretty substantial losses.

The majority of investors would probably be put off by the sheer number of unknowns in the equation, as currencies like these are more akin to betting on horses than putting a solid investment in the bank.

Bitcoin or Property?

so, the real question that we have been trying to answer this whole time is whether or not you should look into bitcoin or property as an investment. Generally speaking, we have to look at the strengths and weaknesses of the UK property market to decide on that one. 

The buy to let property market is one that has money winning attributes the bitcoin just won’t have. For example, the property is a very real asset, it’s something that has real value, and a  fixed presence. Bitcoin doesn’t have that.

People will always need somewhere to live, which is why property investment has always been so reliable. It’s a very permanent, basic part of life.

Considering that the current demand for property in the UK is much greater than the supplier, and the fact that we are dealing with population growth, you get a massive shoot in upwards towards hotly demanded property. This is a good investment if you get in early.

Just recently, it was decided that the property market in the UK was too big to collapse, with experts pointing to the preventative measures that the government have put in place to support the industry during the COVID-19 pandemic.

After the first lockdown in 2020, the industry began to open up again, and hasn’t closed down throughout the pandemic thus far. It’s obvious that the government does recognise the importance of the property market in terms of its impact on the overall economy of the UK.

We’ve seen some fairly substantial reductions in stamp duty, for example, as well as land tax. When you pair those with other initiatives that have been created by the government, it’s easy to see that there is an emphasis on getting people to buy property again. 

One of the main drawbacks of bitcoin is that it is not backed up and protected by an authority like the British government. This means it has no particular safety net, so if I did decide to crash, the results would be catastrophic or anybody who made an investment.

One of the biggest problems that we’ve had is that it is difficult to predict the future of bitcoin. People have tried, again and again, and the end result is often difficult and confusing.

There have been speculations about what will happen to the currency if it were acquired by a company, or something similar, but it’s just too early and cryptocurrency history to make these kind of assertions

This operates in pretty sharp contrast to the property market in the UK, which has just had a massively turbulent period, but at the same time came out with relative stability. The forecast for increases in price did change and vary for a while, but generally speaking, it has settled down.

Stokemont’s Final Thoughts 

When you look at what’s going to be best for an investment, property is the clear winner. There is no denying that when it comes to poverty, it is far more reliable, far more consistent, and potentially much more lucrative than a volatile currency like bitcoin.

Bitcoin does have an immediate set of strengths, but when we have to frame the argument within the context of an investment, something that needs to be solid and reliable, it has to be property. It’s not necessarily the most exciting, and it can be quite slow, but it is a solid investment nonetheless. 

Property Valuation are one of the services that we take great pride in doing on a day-to-day basis here at Stokemont. 

If you would like to discuss how our team of highly experienced and qualified RICS Valuers and Surveyors can be of assistance to you, give us a call today and we would be more than happy to assist and advise you.

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