Monday, May 16

Spain: bitcoin is more profitable than buying a flat to rent


Key facts:
  • Bitcoin is the most profitable financial asset since 2010, but high risk due to its volatility.

  • 2022 is a good time to buy a home, although bitcoin can bring more profit.

A few hours ago, Business Insider published a report from which it can be deduced that, in Spain, buying bitcoin (BTC) would be more profitable than buying a home as an investment to put it up for rent. This is because the chances of the cryptocurrency revaluing are much higher in less time.

The report points out that bitcoin is the most profitable financial asset of the last decade, considering the price increase it has had since then. With a $100 investment in 2010, you would now have $9 million, he says. On the other hand, this time frame may not even have been enough to recover the investment of the purchase of a home.

For example, in the center of Madrid, the average price of a 40 square meter apartment is almost 200,000 euros, according to data from Idealista. Recovering this investment would take a term of 23 years if it is rented at the average rental price in the area for that size, which is 700 euros per month, according to the platform.

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In contrast to this, as CriptoNoticias reported, buying bitcoin allows you to generate profits in a short time if its price rises, perhaps even in just minutes or days of trading.

In addition, it does not require an initial investment as large as a home. You can invest as much money as you want in bitcoin, making it accessible to anyone. Above all, in the current context of inflation where saving is more difficult. The study noted that, according to IE University, 15% of Spaniards already have cryptocurrencies.

This is what the price volatility that bitcoin has had in the last year looks like. Source: coingecko.

Bitcoin looks better as an investment than a home, but it’s high risk

The waiting period to recover the investment in a home is long. However, the advantage of this type of investment is that, once that time frame has passed, the profits can be relatively stable. In contrast to this, buying bitcoin is a high risk as it can devalue against the euro due to its price volatility.

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An example of this is the recent price low that hit $40,000 in January from its all-time high of $67,800 last November. Although the upward trend that it has had since its inception 13 years ago suggests that it will continue like this, beyond the fact that past returns are no guarantee of future returns.

An investigation by Visa, among others, reveals that the growth of bitcoin adoption in the last year, not only at the individual level, but also in companies, will continue to rise. This promotes the rise in its value, considering that the higher the demand, the higher its price rises, as analyst Willy Woo pointed out in his predictions about bitcoin for 2022.

Likewise, Business Insider maintains that this year is also seen as a good time to buy a home. This is due to the current mortgage interest rate, which is negative at -0.5%, according to the policy of the Central Bank of Spain for the economy to recover.

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