Cryptocurrencies, such as Bitcoin, and other stores of valuable digital assets have slowly become incredibly monetized, and it is gaining traction through the chaos which is standing in the way of the traditional financial system. Many experts predict that in the future, many key assets will undergo major demonetization. The big four categories, such as currency, bonds, equity, and real estate may not be as lucrative as Bitcoin in the future, as this has been the case in previous years.
Bitcoin Demonetizes Real Estate
According to the billionaire crypto investor, Micheal Saylor, bitcoin tends to demonetize real estate. How does it do that? Well, if you own a piece of commercial real estate, and you begin to realize that the structure is prone to damage. You have to pay plenty of maintenance fees frequently to make sure that it retains value. The maintenance fee is often 2 to 3 percent of the total value of the property. Not to mention, owning a property also means that you are subject to property taxes. A 10 million dollar property can cost you about 100, 000 to 200, 000 dollars to hold.
This is another form of maintenance, especially if you own the property in a residential or commercial location. Not to mention, the limitation on who you can rent the building to will also impair the value of the building. Even if you rent the building and earn passive income, the building is still not as valuable as bitcoin. In fact, Micheal Saylor claims that if you eradicate all the expenses that a property will cost you, it will still not compete with Bitcoin in terms of better assets or investments.
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Bitcoin is Consuming Other Assets
Bitcoin is a technology that provides qualities that other asset classes, such as Gold, stocks, bonds, and others do not have. These qualities include expandability, visibility, and exclusivity. Bitcoin throws off cash, especially when you consider that there are businesses that give out 70 to 80 percent margins. It has a better performance in terms of growth than many other assets as well.
Bitcoin vs Fiat Currency
Bitcoin is a decentralized digital currency that operates on a peer-to-peer network, which means that it is not controlled by any government or financial institution. This is in contrast to fiat currency, which is issued and regulated by central banks and governments. There are several reasons why some people consider Bitcoin to be a better asset class than fiat currency:
Bitcoin has a limited supply of 21 million coins, which means that there is a finite amount of this currency that can ever exist. In contrast, fiat currencies can be printed at will by central banks, which can lead to inflation and a decrease in the value of the currency over time.
Bitcoin is decentralized, which means that it is not controlled by any single entity. This reduces the risk of government or central bank interference and manipulation, which can have a negative impact on the value of fiat currencies.
Security and Transparency
Bitcoin transactions are secured by cryptography, which makes them very difficult to counterfeit or manipulate. In contrast, fiat currency transactions can be subject to fraud, counterfeiting, and other forms of financial crime. The Bitcoin blockchain is also a public ledger that records all transactions on the network. This provides a high degree of transparency and accountability, which is not always possible with fiat currencies.
Bitcoin can be sent and received instantly, and it can be used for transactions across borders without the need for intermediaries such as banks. This makes it a more accessible and inclusive form of currency than fiat currencies, which can be subject to restrictions and barriers.
It is important to note, however, that Bitcoin is a relatively new and volatile asset class, and its value can fluctuate significantly in short periods of time. As with any investment, it is important to do your own research and understand the risks before investing in Bitcoin or any other asset class.
Why Invest in Crypto Rather than Stocks or Bond?
Cryptocurrencies, such as Bitcoin or Ethereum, are a relatively new asset class that operates on a decentralized blockchain network. In contrast, stocks represent ownership in a publicly traded company, while bonds represent a debt that is owed by a borrower to a lender.
It has the potential to provide high returns, especially during periods of market growth. This is because the price of cryptocurrencies can increase rapidly, sometimes even doubling or tripling in value over short periods of time. However, it is important to note that cryptocurrencies are also highly volatile and can experience significant losses.
Cryptocurrencies are also decentralized, meaning they are not controlled by any government or financial institution. This can provide a level of independence and immunity from government interference that may not be present in stocks or bonds. Furthermore, investing in cryptocurrency can provide diversification to a portfolio that may be heavily weighted in stocks or bonds. This can potentially reduce the overall risk of the portfolio.
It Advances Over Gold
Both cryptocurrency and gold can be considered alternative investment options to traditional stocks and bonds. However, there are several advantages that cryptocurrency may have over gold as an investment option: Cryptocurrency is digital and can be easily transferred between wallets and accounts, making it more portable than physical gold. This also makes cryptocurrency more accessible to a wider range of investors, as physical gold can be more difficult and expensive to store and transport.
Cryptocurrency transactions are recorded on a public blockchain ledger, which provides transparency and immutability. This makes it easier to track the history of a particular cryptocurrency and can reduce the risk of fraud or counterfeiting. It can also be bought and sold on a wide range of digital exchanges and platforms, making it more accessible to investors than gold. Gold, on the other hand, is typically bought and sold through physical dealers or exchanges, which can be less convenient and more expensive.
While both cryptocurrency and gold can be volatile investments, cryptocurrency has the potential for higher returns in a shorter period of time. This is because the cryptocurrency market is less established and can experience rapid price movements. It can be used as a medium of exchange, making it potentially more useful than gold as an investment. Gold is primarily used as a store of value or for jewelry and industrial purposes.
Despite all the evidence, cryptocurrency is a relatively new and untested investment option, and it may carry higher risks than more traditional investments. As with any investment, it is important to do your own research and consult with a financial professional before making any investment decisions.