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Rise of Crypto-What does it Mean?

By
Real Estate Agent with Coldwell Banker Select

On CoinMarketCap, it shows the global Crypto Market is up to 2.7 Trillion Dollars with the SEC approving 11 Bitcoin ETFs in early January. For context, the value of the amount of gold ever mined is a about 12 Trillion with about half in the form of jewellery and the other half in bars, coins and government reserves etc. (World Gold Council).

It's a sign that people are noticing that the US is showing no signs of reining in spending and that the currency is getting debased at an accelerating rate. Other options for assets to invest in include the stock market and of course real estate.

An interesting prospect is the ability for a layer 2 smart contracts to facilitate a real estate transaction. (Polygon, ImmutableX, Stacks, Arbitrum). The complexity of a real estate transaction could be a good test for streamlining the process of purchasing and selling real estate. It is, due to the fact that there are humans involved, fraught with risk when you associate a real world asset with a crypto. A recent example is the 2007 financial crisis, when hedge funds and investment banks created the CDO, Collateralized Debt Obligations, which were morgages that were pooled together by risk level(tranches) and resold to pension funds and institutions. In hindsight, we now know that all three tranches eventually became completely garbage. The more complicated a product is, the higher the fees and less the customer understands what they are getting.

The advent of AI and new forms of assets such as Crypto create incredible opportunities and also dangers. It is increasingly apparent that people that don't invest are falling further behind and struggling, it's more important than ever to understand the wealth building properties and the importance of investing in real estate.

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Comments(2)

Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Crypto is far too volatile and dangerous for people that cannot afford to lose a dime.

Mar 11, 2024 06:14 PM
Peter Tamura
Coldwell Banker Select - Tulsa, OK
BANNOCHIE TEAM

Hi Ed,

Thanks for your comment! No argument from me there!

Mar 11, 2024 08:13 PM