{"id":2249,"date":"2022-05-30T11:00:00","date_gmt":"2022-05-30T15:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2249"},"modified":"2024-04-25T23:18:44","modified_gmt":"2024-04-26T03:18:44","slug":"bitcoin-or-real-estate-for-the-investor-which-is-better","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/bitcoin-or-real-estate-for-the-investor-which-is-better\/","title":{"rendered":"Bitcoin or Real Estate for the Investor: Which Is Better?"},"content":{"rendered":"\n
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If you ask J.P. Morgan, you might be surprised at the answer.<\/p>\n\n\n\n

At a time when real estate and other private investments are undergoing a valuation reset, a recent J.P. Morgan report highlights cryptocurrency. It says digital currencies have overtaken real estate as a \u201cpreferred alternative asset class.\u201d (Alternative assets are investment choices that don\u2019t fall into the stocks-and-bonds category.)<\/p>\n\n\n\n

Bitcoin is quite a bit down (~60%) from its all-time high. In the \u201ccrypto winter\u201d of 2017-18, it lost more than 80% of its value and took three years to rebound. In 2022, crypto assets are showing jittery reactions to inflation and rising interest rates.<\/p>\n\n\n\n

But with bitcoin trading around $30,000 in May 2022, J.P. Morgan\u2019s latest note to investors indicates \u201csignificant upside for digital assets from here.\u201d The bank ascribes a fair value of $38,000 to bitcoin.<\/p>\n\n\n\n

J.P. Morgan stands out among large banks for its early and significant investments in the world of crypto. This, although Jamie Dimon, the CEO of JPMorgan, called bitcoin out in 2017 as \u201cworthless<\/a>.\u201d<\/p>\n\n\n\n\n\n\n\n

Strategic Investments<\/h2>\n\n\n\n

J.P. Morgan likes to emphasize the strength of venture capital\u2019s movement into blockchain-based digital assets. Investment keeps pouring in, despite the recent $50 billion collapse of the not-so-stable stablecoin Terra in May 2022. The flow of capital into blockchain projects means another long crypto winter is unlikely to happen, say the bank\u2019s strategists.<\/p>\n\n\n\n

J.P. Morgan itself has established a presence on the Ethereum-based platform Decentraland, a leading destination for metaverse property<\/a>. It sees the metaverse as a $1 trillion opportunity.<\/p>\n\n\n\n

In February 2022, the bank published a 17-page booklet titled Opportunities in the Metaverse: How Businesses Can Explore the Metaverse and Navigate the Hype vs. Reality<\/em>. It observes that \u201cCovid-19 accelerated the digitization of our lives\u201d and ascribes \u201cexplosive interest in the metaverse\u201d to its versatility:<\/p>\n\n\n\n

[T]here is no one virtual world but many worlds, which are taking shape to enable people to deepen and extend social interactions digitally. This is done by adding an immersive, three-dimensional layer to the web…<\/em><\/p>\n\n\n\n

The metaverse is accessible from anywhere people take their smartphones, and is, says J.P Morgan, \u201cbreaking down boundaries and democratizing access to key goods, services and experiences.\u201d<\/p>\n\n\n\n

J.P. Morgan takes note of the steady rise in metaverse property values. They doubled \u2014 from about $6,000 to about $12,000 \u2014 in 2021 alone.<\/p>\n\n\n\n

Virtual homes are available to be adorned with original art. Commercial space is available for major brands to sell goods, both real and virtual. Both types of property need metaverse mortgages, and reliable methods for the trading and holding of digital assets.<\/p>\n\n\n\n

Then there\u2019s the world of virtual gaming, which, J.P. Morgan writes, \u201chas elements that parallel the existing global economy.\u201d This means an international banking system has a role to play. The bank sees its key contributions as:<\/p>\n\n\n\n