Real Estate & Bitcoin: Navigating the Future of Property Investment

Disclaimer: This is not financial advise. The content provided on this blog is for informational and educational purposes only and should not be considered financial advice. The opinions expressed herein are solely those of the author and do not necessarily reflect the views of any affiliated organizations or entities.

The intersection of real estate and Bitcoin is becoming increasingly relevant as both sectors undergo significant transformations. This article explores the potential of Bitcoin to complement real estate investment, especially in the context of economic challenges posed by traditional monetary policies, also what are the biggest RE investors doing with Bitcoin?

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The Economic Challenge: The Federal Reserve's Role

The Federal Reserve (Fed) has long been a central player in the U.S. economy, wielding significant influence through its control over monetary policy, including money printing and interest rate adjustments. Critics argue that the Fed's actions, particularly the constant printing of money and manipulation of interest rates, have contributed to economic instability. This has led to concerns about inflation and the devaluation of the dollar, which many believe were key factors in the economic crises experienced between 2008 and 2011

As we advance into a new technological era, marked by artificial intelligence and digital transformation, two constants remain: the necessity of real estate and the emergence of Bitcoin as a resilient asset. Bitcoin, often referred to as "digital gold," is considered the hardest asset on the planet due to its limited supply and decentralized nature.

8 Facts about the Federal Reserve and its M2 Money supply printing from 1971 - 2024

• In 1971, the M2 money supply stood at approximately $685 billion.
• By January 2020, it had reached $15.38 trillion.
• Current level as of July 2024, the M2 money supply stands at $21.054 trillion, This represents a staggering increase of over 2,970% from 1971 to 2024..
• Total increase: The M2 money supply has increased by about $5.674 trillion from January 2020 to July 2024.
• Percentage increase 2020 - 2024: This represents a growth of approximately 36.89% over this period.
• Peak value: The M2 money supply reached an all-time high of $21.722 trillion in April 2022.
• In 1970, the average income was $9,400, making the house price-to-income ratio about 2.5:1
• By 2024, increased significantly in many areas, often exceeding 5:1 or higher in major metropolitan

Since the US' departure from the Gold Standard in 1971, the FED has printed a lot of money... and there's likely no expectation of that ending...

The only solution to that problem is storing your value into real, hard assets like Real Estate that will retain their value over time, unlike the dollar.

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You may not understand Bitcoin today, but ask yourself this one question. Why does BlackRock have so much Bitcoin?

Let’s keep in mind, as an asset manager, BlackRock is basically one of the world’s largest Real Estate Investors that invests capital on behalf of their clients (kind of like a realtor). BlackRock knows what I know. Bitcoin is impossible to replicate or fabricate. There will only ever be 21million full Bitcoin. It’s simply the most powerful decentralized computing network on the planet (measured in HashRate)... It appears to be an unstoppable force/network that is available to any individual on the planet to be apart of.
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How much Bitcoin does BlackRock own?

The BlackRock's iShares Bitcoin Trust (IBIT) currently holds 357,736.8 BTC as of August 26, 2024. That is $21,464,208,000 worth of Bitcoin bought in 2024 alone.

So, now you know one of the biggest Real Estate Investors at best, really likes Bitcoin. 21 Billion worth of likability. Or at-least their clients do.

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Bitcoin as a Complementary Asset to Real Estate

Bitcoin offers several advantages that make it a complementary asset to real estate:

Store of Value: Bitcoin's limited supply makes it a strong store of value, potentially protecting against inflation that erodes the value of fiat currencies. Real estate investors can convert cash flows, such as rental income, into Bitcoin to preserve value over time

Security and Fraud Prevention: Bitcoin transactions are secured by blockchain technology, which provides a transparent and tamper-proof record. This can reduce fraud in real estate transactions, such as title fraud, by ensuring clear and verified ownership records

Liquidity and Flexibility: Bitcoin can enhance liquidity in real estate investments. Unlike traditional real estate, which is often illiquid, Bitcoin can be easily traded or used as collateral for loans, providing investors with more flexibility

Reduced Transaction Costs and Time: Utilizing Bitcoin can streamline real estate transactions by eliminating intermediaries, reducing costs, and speeding up the process. Transactions that typically take weeks can be completed in minutes with Bitcoin

Strategies for Integrating Bitcoin in Real Estate

For realtors and landlords, integrating Bitcoin into real estate operations can open new avenues for profitability:

Investment Diversification: Allocating a portion of real estate profits to Bitcoin can diversify investment portfolios and potentially capture Bitcoin's growth. This strategy allows investors to benefit from both real estate's stability and Bitcoin's appreciation potential

Security Deposits and Reserves: Holding security deposits and repair reserves in Bitcoin could protect against inflation and increase in value over time, unlike cash reserves that may lose purchasing power

Collateral for Financing: Bitcoin can be used as collateral to secure loans for real estate investments, providing an alternative financing option without the need to liquidate holdings

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A Hopeful Future for Real Estate

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The integration of Bitcoin into real estate offers a promising future for the industry. As more investors and professionals embrace this digital asset, the potential for increased profitability and security becomes apparent. The real estate market can benefit from Bitcoin's unique properties, such as its resistance to inflation and ability to streamline transactions.
Realtors and landlords can find hope in the evolving landscape, where Bitcoin not only complements but enhances traditional real estate practices. By adopting Bitcoin strategies, the real estate industry can navigate economic challenges and emerge stronger in the technological age. As consensus shifts towards utilizing Bitcoin alongside real estate, a return to profitable and secure property investment is on the horizon.

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