Cryptocurrency Has Become an Increasingly Popular Form of Investing

"Bitcoin broke the $100,000 price point yet again on May 8, and while some investors are still arguing the merits of investing in real estate, Bitcoin or stocks, Grant Cardone had another idea: Why not put all three together?

"What if the real estate bought my Bitcoin, and then I could actually take the whole thing public?"

What he did then was purchase an $88 million piece of real estate for $72 million as a correction (because of the current state of the debt market). He then added $15 million worth of Bitcoin to the transaction and put the two values — $72 million and $15 million — together in a separate fund.

Then, he gave his audience the chance to take part of that Bitcoin-real estate fund, which they did. Since neither the property itself nor the Bitcoin has debt on it, the monthly cash flow is around $350,000. Cardone then uses that money to purchase more Bitcoin.

The end result?

Cardone will still own the real estate in, say, four years. Assuming the value of that property stays valued at $88 million, his overall investment will increase thanks to the combination of purchasing Bitcoin at today’s prices and real estate.

"So, what’s better than real estate or Bitcoin? What’s better is if I could get Bitcoin out of my real estate and then take the two things…and bring it to the public markets at the end of this year or the first of next year and we’re gonna go ring the bell and turn it into a piece of paper.”

As of now, Cardone has done this process four times with the intent of doing ten in total.

Expert Opinion: Buying Real Estate Using Crypto

So, should you use Bitcoin to invest in real estate? It depends on your risk tolerance and time horizon.

“Long-term holders sitting on significant gains may want to convert a portion of Bitcoin to real estate as a way to diversify. They get peace of mind and don’t run the risk of seeing 6- or 7-figure portfolio swings. Plus, real estate offers passive income opportunities and can be a hedge against crypto’s volatility. However, if Bitcoin’s price pumps shortly after the purchase, you may have buyer’s remorse.”

An alternative that can still pad your investment portfolio is to get a BItcoin-backed mortgage.

“The loan is secured by the real-estate + BTC, and you can make your monthly mortgage payments as a percentage of your BTC, denominated in USD. This is the best of both worlds!”

But know that Bitcoin has its challenges, particularly when it comes to stability and regulation. Its value has skyrocketed, but it’s still a volatile asset. For some, investing with crypto could also make it harder to make effective real estate deals — though this could change with time.

“While it’s an interesting concept, I don’t believe buying real estate with Bitcoin is practical in most cases — at least not yet. Real estate is still a fundamentally traditional asset class, and the volatility of crypto creates too many unknowns for both buyers and sellers.” said Louis Adler, Co-Founder, Principal and Real Estate Broker at REAL New York.