If You Invested $10,000 In Real Estate Instead Of Bitcoin Last Year, Here’s Where You Would Be Now

For much of the past 10 years, Bitcoin BTC/USD has been driving the conversation when it comes to alternative investments. It is not difficult to understand why. Bitcoin is a perfect storm in terms of its ability to generate press and entice casual and seasoned investors to place huge bets on it. Many investors hailed Bitcoin as the currency of the future and emptied their wallets to put everything in Bitcoin.

They looked like geniuses when Bitcoin hit an all-time high of nearly $68,000 in November 2021. Unfortunately, anyone who didn’t get off the Bitcoin train in November learned the hard way that Bitcoin is as volatile as it is lucrative. Bitcoin has been in freefall for most of this year. All of this begs the question, would you have been better off putting $10,000 in real estate or Bitcoin a year ago?

Bitcoin from January 2, 2021 to July 21, 2022

To assess whether $10,000 in Bitcoin or a $10,000 real estate investment was a better idea, let’s do an apples to apples comparison. According to Benzinga, a single Bitcoin was trading at $29,405 on January 2, 2021. This means that investing $10,000 would have bought you 0.34 of Bitcoin, or just under a third of a coin.

Bitcoin has been posting strong gains for most of 2021. In fact. he broke his own all-time record several times during the year. The peak was a November 2021 valuation of $67,553.95. Needless to say Bitcoin investors were dancing in the streets. Many of them used their profits to reinvest in Bitcoin.

In their defense, reinvesting in a performing offer is not the least bit controversial. Many investors adopt this strategy, both for traditional and alternative investments. But, as the old saying goes, “What goes up must come down”. Shortly after Bitcoin peaked, early glimpses of inflation started dragging the economy down, and then the Federal Reserve started hinting at interest rate hikes.

That’s when the bottom started to fall. Since then, bitcoin has been in freefall, dropping below $20,000 before rallying slightly back to its current value of $23,789. This means that the $10,000 worth (or 0.29405) of Bitcoin that you bought last January is now worth 0.23154 of Bitcoin, or roughly $8,100. In other words, you would be down about 19% on your initial investment.

A real estate investment of $10,000 from January 2021 to today

Let’s imagine for a moment that you are a less adventurous alternative investor who wants to put your money in something other than the stock market with $10,000 in January 2021. So, instead of Bitcoin, you have decided to put your $10,000 in the Flagship real estate fund.

The Flagship Real Estate Fund works like a normal investment and since it is not a cryptocurrency, you do not convert your investment capital into another monetary unit. The fund itself is a non-traded real estate investment trust (REIT) with the stated objective of providing passive income to investors while allowing them the opportunity to benefit from appreciation in the value of the fund’s assets.

Flagship consists of a diverse mix of core-plus, fixed income and opportunistic securities from the following real estate sectors:

  • Single family rentals
  • Multi-family developments
  • Commercial properties

Based on historical fund performance data, your $10,000 investment from January 2021 would be worth $13,480 at the end of June 2022. In other words, you would be up almost 35% on your original investment. It’s not as high as Bitcoin at its peak, but $13,480 is 66% more than the $8,100 you would have if you put your $10,000 in Bitcoin instead of the Flagship Fund a while ago. a year and a half.

A case of the tortoise and the hare

REITs like the Flagship Fund may not be as enticing as cryptocurrencies like Bitcoin, but a 30% gain beats a 19% loss any day of the week. This example is a classic case of tortoise versus hare. Bitcoin took the lead as Flagship Fund posted slow and steady returns, but at the end of the race, it was the Flagship Fund that prevailed. Timing is everything.

If you had dumped your Bitcoin at its peak in November, you would have earned over 600% on your initial investment. If you’ve waited for another record, you’ve paid a heavy price. So if you have capital to invest in an alternative investment, you should know that real estate is still a proven winner that is capable of producing impressive returns.

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