Cryptocurrency has become an increasingly popular form of investing, in large part thanks to the
prevalence of Bitcoin
— which yet again traded above the $100,000 price point on May 8.
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Ever since programmer Laszlo Hanyecz spent 10,000 BTC on two pizzas back in 2010, marking the first real-world transaction using Bitcoin, investors have pushed the limits of what they can — and cannot — do with the cryptocurrency.
One particular investor,
Grant Cardone
, recently shared in an episode of “Opening Bid” that he’s using Bitcoin to buy real estate. Here’s how he’s doing it, and what industry experts have to say on the matter.
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How Grant Cardone Is Incorporating Bitcoin Into His Real Estate Investment Strategy
Some investors debate the advantages of putting money into
real estate
, whether it be Bitcoin or stocks, Grant Cardone suggested an alternative approach: What about combining all three?
“What if the real estate acquired my Bitcoin, and as a result, I could genuinely go public with the entire venture?” he mused.
What he did next was buy a piece of real estate valued at $88 million for $72 million as an adjustment due to the present market conditions.
debt market
He subsequently included $15 million worth of Bitcoin into the deal and combined these amounts—$72 million and $15 million—into a distinct 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?
In about four years, Cardone will continue to be the owner of the real estate. If we assume that the value of this property remains at $88 million, then his total investment would grow due to the addition of buying Bitcoin at current market rates along with owning the real estate.
“So, what’s better than real estate or Bitcoin?” he asked. “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.
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Specialist Viewpoint: Purchasing Property With Cryptocurrency
Therefore, whether you should utilize Bitcoin for investing in real estate hinges on your level of risk acceptance and how long you plan to keep your money invested.
“Ian Kane, CEO and founder of Firepan, suggested that long-term investors with substantial profits might consider converting part of their Bitcoin into real estate for diversification purposes. This approach provides them with security and prevents potential fluctuations in their multi-figure portfolios,” he explained. Additionally,
Real estate provides chances for earning passive income.
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 backed by the property and Bitcoin, and you have the option to make your monthly payments based on a percentage of your Bitcoin, calculated in US dollars,” explained Kane. “It’s like having the perfect blend of both worlds!
However, recognize that Bitcoin faces several hurdles, notably concerning stability and regulatory issues. Despite its value having surged dramatically, it’s
still a volatile asset
For certain individuals, engaging in cryptocurrency investments might complicate making efficient real estate transactions—though this situation could evolve over time.
While this idea may be intriguing, I don’t think purchasing property using Bitcoin makes sense in most situations—at least not currently,” stated Louis Adler, who co-founded and leads REAL New York as a principal and real estate broker. “The realm of real estate remains deeply rooted in tradition, whereas cryptocurrency’s fluctuations introduce numerous uncertainties for prospective purchasers and vendors alike.
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Sources
-
Trakx, “
The Story of Bitcoin Pizza Day: 10,000 BTC Bought One Pie
“ -
Yahoo Finance, “
How Grant Cardone is utilizing Bitcoin for purchasing property
“ -
Ian Kane,
Firepan -
Louis Adler,
REAL New York
The piece initially appeared on
:
Grant Cardone Is Purchasing Property With Bitcoin — Should You?
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