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Bitcoin vs. Property Investment: The Risks

Written by James Trafford Posted On Monday, 13 May 2019 05:30

Unless you have been living under a rock for the last few years, by now you will most certainly have heard of the cryptocurrency, Bitcoin, and some of the success stories from people who were lucky enough to make the most of it before it was even a ‘thing’.

However, if you are looking to invest some money but either have enough property already, or just fancy something a bit different, could Bitcoin be the answer you’ve been waiting for?

Investing in Bitcoin comes with a mighty element of risk, but then this could be true of investing in anything as you can never guarantee a positive return on that investment, no matter what you’re buying into or how calculated you think you’ve been with weighing up the pros and cons.

External factors in all investments

Bitcoin has been compared to commodities such as gold, but how does it compare to property? Is it really riskier that buying property?

All investments, whether it be cryptocurrencies, property or almost anything else you can think of, come with a whole plethora of external factors which cannot be controlled or predicted by you as the investor. Whilst you have some control over your investment, e.g. by deciding how much money you want to invest, and what you want to invest in, the truth of the matter is that no matter what you decide to invest in, there will always be factors that dictate changes that may affect your investment which you will not be able to prevent. In terms of property, such factors can include fluctuating prices of the property market, consumer demand and other costs associated with buying and letting property (taxes, stamp duty etc.)

So, with this in mind, is it less risky to invest in Cryptocurrencies such as Bitcoin?

Bitcoin: the additional risks

Unlike the physical commodity of property, the online based cryptocurrencies are far more exposed to fraud through hacking issues. Unfortunately, too many hackers are able to commit crimes when it comes to the theft of cryptocurrency, as let’s be honest, it is far easier for someone to steal Bitcoin off of you than it is for someone to steal an entire property from you, especially as a lot of the time you will not know that you have been stolen from until you next login.

With this is mind, many people would argue that investing in Bitcoin poses a far higher risk than property, although it must be bared in mind that with Bitcoin you do not have the other risks that come with investing in property, especially if you intend to rent this property out to tenants.

So, what should I invest in, Bitcoin or Property?

Ultimately, all investments carry potential risks, and there is not a clear answer to this question. In terms of both, ensure never to invest when the price is high, keep an eye on fluctuations and make your move when the time is right. Regardless of what you choose to invest in, remember that your security and the safety of your assets and investments should be the top priority. Carry out your own research and you will soon find that investment in property and bitcoin are just as risky as each other, it is simply down to the choice of the investor.

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