Bitcoin & Real Estate

Welcome to the 17th edition of The Bitcoin Newsletter,

I am happy and overwhelmed by the positive feedback I have received for the Bitcoin & real estate podcast that Preston Pysh and I recorded for his Bitcoin Fundamentals series. We are entering a new era in which the world will likely start to realize that Bitcoin is a black hole that is sucking up the monetary premium that other scarce goods have accumulated in an inflationary fiat system.

With the approval of the numerous Bitcoin ETFs, the floodgates to traditional finance were opened. I expect real estate investors to follow suit and recognize the benefits of Bitcoin as a store of value.  In this edition of the newsletter, I have compiled some of my most important publications and public appearances that address the topics and strategies covered in the podcast with Preston.

The idea was to create newsletter as a resource for yourself, friends and family who want to learn more about the fascinating intersection between Bitcoin and real estate.

Best Regards,

Leon

DEEP DIVE

---

Bitcoin & Real Estate

​​What do Bitcoin and real estate have in common ? For some, calling bitcoin Digital Real Estate may sound too abstract. Below I will explain why the two are similar in many ways.

Real Estate
People used to own real estate because of its utility value, which is characterised by the fact that you can live in it or use it for production. Today, however, it serves the world as the primary asset for storing value. A former function of money that is no longer possible due to decades of monetary inflation that has decimated people's purchasing power.

This development coincides with the "Nixon shock" of August 15, 1971, when U.S. President Richard Nixon announced that the U.S. would end the convertibility of the U.S. dollar into gold. Since then, central banks around the world have started operating a fiat-based monetary system with floating exchange rates and no real currency standard. As shown in the graph below, the fiat money supply has been rising steadily ever since 1971 e.g. USD, EUR.

USD Money Supply

Source: Board of Governors of the Federal Reserve System (US), Federal Reserve Bank of St. Louis, 28.01.2024.

Real estate has served as the world's primary asset to protect wealth from the resulting inflation. According to some estimates, around 52% of global wealth (≈$380 trillion) is stored in real estate. In addition to being used as a “savings account”, real estate is one of the most frequently used forms of collateral in the banking system. This practice is common among mortgages, personal loans and business loans.
Therefore, real estate as an asset has a great impact on credit markets and has become one of the fundamental assets in the global financial system.

Global real estate universe in comparison, 2022

Source: Total Value of Global Real Estate: Property remains the world’s biggest store of wealth, Savills Research, 09.2023.

Real Estate 2.0

Bitcoin is a near perfect store of value. Upon closer inspection, it becomes clear that real estate cannot compete with bitcoin as such. The latter is rarer, more liquid, cheaper to maintain, easier to move and harder to confiscate, tax or destroy.

The number of Bitcoin wallet addresses exceeded 48 million in August 2023, setting a new historical record. More and more people are recognizing the advantages of bitcoin and using it to store value.

This is also expected to have a positive impact on its use as collateral. Both functions (store of value and collateral for lending) are closely linked. Why would a bank (or anyone else) accept collateral that loses value over the long term? The infrastructure around access to financial services related to bitcoin and its use as collateral is still in its infancy. But the possibilities are extremely promising.

Bitcoin can be used anywhere in the world and allows developing countries in particular easy access to credit systems. From personal conversations, I know that in places with little access to credit markets, such as Indonesia, bitcoin is used as a savings tool and ultimately as collateral for loans. Bitcoin is easier to access, buy, store, use, and maintain and as a digital store of value, it has a much higher velocity than real estate. You could live in Berlin but get a loan from a bank in Singapore.

For that reason, bitcoin also has the potential to replace real estate as the collateral of choice in the distant future, particularly given its superiority over real estate as a store of value.

If we assume that bitcoin will account for 10 to 15% of real estate market capitalization over the next few decades, it has the potential to become a $33 to $50 trillion asset. That would mean $1.5 million to $2.3 million per bitcoin if the bitcoin supply reached its theoretical maximum of 21 million.

Bitcoin: The Internet of Value

Just as email and messaging are the preferred way of transmitting information today, I believe bitcoin will be the preferred way of storing value in the future.

Much like retail stores in the mid-90s did well to embrace the Internet and e-commerce because it threatened and changed their business model, real estate investors today would do well to embrace Bitcoin. Even if this sounds abstract. That's certainly how it sounded to retailers back then. But, those who have recognized the opportunities of the internet in the late 1990’s and early 2000’s are successful and dominant players today (see Amazon).

Innovation and technological progress only mean danger for those who defy the passage of time, but it actually offers great opportunities. Bitcoin’s volatility should not distract from the opportunity it presents. Those who rejected the internet missed out on one of the greatest business opportunities of their lives. Those who reject Bitcoin will likely meet the same fate.

As we can see in the graph from 2021 below, the price of bitcoin largely follows the adaptation of the internet. In 2020, the development of the bitcoin price was roughly the same as the adaptation of the internet in 2005. If the bitcoin price continuous to follow a similar curve as the internet adoption, we will see a bitcoin price of over $1 million in approximately 8 years (around 2032). Nobody can predict the future, but this should illustrate what opportunities Bitcoin presents.

Source: FX Street, 2021

Bitcoin & real estate content

Below you will find a list of my most important articles and public appearances on the subject of Bitcoin and real estate from 2022 to early 2024.

Published articles

Why Bitcoin Is Digital Real Estate READWhy Every Real Estate Investor Should own Bitcoin READWhy Real Estate Investors Should Consider Strategies for Bitcoin READ
Why Bitcoin is Pristine Collateral for Lending  READThe Evolving Role of Real Estate and Bitcoin in Wealth Creation READ

Podcasts

The "What is Money?" Show - Bitcoin is Digital Real Estate with Leon Wankum (WiM291) WATCHBitcoin Fundamentals - Bitcoin & Real Estate w/ Leon Wankum (BTC164) Watch

Video appearances

Hard Money Show with Natalie Brunell, Michael Saylor, Jeff Both and Leon A. Wankum WATCHBitcoin Conference Amsterdam panel about Bitcoin and Real Estate risk WATCH

WORTH TO KNOW

---

Podcast and publications

**Bitcoin & Real Estate w/ Leon Wankum (BTC164)**I joined Preston Pysh on the Bitcoin Fundamentals podcast to discuss Bitcoin and real estate. We discussed how Bitcoin could redefine real estate's value and affect property prices, financing, and monetary standards. A quality conversation about the intersection of Bitcoin and real estate. WATCH

Digital Real Estate – the book
As I have recently announced on X, I'm working on a book about Bitcoin and real estate. The book, which has the working title “Digital Real Estate”, will go into detail about the digital disruption that Bitcoin represents to the real estate sector, describe explicit strategies for real estate developers to benefit from this technological disruption, and talk about the societal changes that may occur as Bitcoin potentially replaces real estate as a central asset in the global financial system. READ

IDEAS OF INTEREST

---

Grant Cardone - Selling My Mansion For Bitcoin! Real Estate vs Bitcoin Which Is Better? In this video, real estate mogul Grant Cardone explained why he prefers investing in Bitcoin to buying real estate. He shows that real estate has increased in value in fiat currencies in recent years, but has fallen in value in bitcoin. It all depends on which unit of account you use.

---

If you want to support me. Feel free. You can send me some satoshi/bitcoin.

My lightning address is: [email protected]

My bitcoin address is: bc1qyc9q89wjzmvaw729tj3wsrsfhft53mjycrjxdk

---

​​Nostr PubKeynpub1v5k43t905yz6lpr4crlgq2d99e7ahsehk27eex9mz7s3rhzvmesqum8rd9

---

ResourcesTwo reasons real estate is world’s most preferred store of wealth READ

Bitcoin will completely change real estate markets and interest rates READBitcoin vs Real Estate: What is the better store of value? READ

Bitcoin: 5+ Years HODL Wave READThe Bitcoin Payment Revolution - Bitcoin 2022 Conference WATCH

---

Photo Credit: Chrysler Building / William Van Alen. Image New York Architecture

---

Disclaimer: the content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Make sure you do your own research before making any investment and be aware of your own risk tolerance. If you like to build on my thoughts, feel free, but please cite me as the source. 2024 - Leon A. Wankum. 

Editing and content creation by Clemens Haidinger.

---

Subscribe now