Anyone moving their investments to Bitcoin?

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Anyone moving their investments to Bitcoin?

Greg Moore
Rental Property Investor · Tampa, FL · Member since 2019 · 128 posts · 166 votes

After watching a YouTube video from Ken McElroy stating 2020 is a wash, 2021 is the time to save up, and 2022 is likely the time to buy (when properties shift from motivated sellers to foreclosures to REO) I decided to redirect some recent Real Estate proceeds out of a 1031 into BTC.

My question is how much Cryptocurency do you personally feel is the right percentage for your investment mix (that is, if you have crypto)?

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
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I prefer Stanley Nickels and Schrute Bucks

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  • Greg Moore
    OP
    Rental Property Investor · Tampa, FL · Member since 2019 · 128 posts · 166 votes
    5y

    @Jeffery Callis what’s your source? I look into this metric quarterly when Glassnode publishes reports on the percent of Bitcoin addresses that are “in the money” (at a profit). In October when BTC jumped to $13k, Glassnode reported,

    “98% of all bitcoin UTXOs are currently in a state of profit,” Glassnode tweeted. “A level not seen since Dec 2017, and typical in previous BTC bull markets.”

    And with BTC being up 46% since Oct it stands to reason the percentage of holders in the green is up, too.

    1Reply
  • Amedeo M.
    Rental Property Investor · Member since 2019 · 77 posts · 36 votes
    5y

    @Greg Moore

    Some answered about bitcoin and gave good inputs.

    I just add that there are Cryptocurrencies you can Stake and make 12% a year and more.

    Not scam Cryptocurrencies but serious projects like, for example, Polkadot.

    Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards.

    So, for example, with 1000 DOT (Polkadot), at the moment worth $4880, can make 649.96$ a year.

    There are some crypto you can even make more, then it becomes gambling.

    I would not mix real estate with crypto. We are talking about two different things where at the end of the day the secret to do it properly is always to diversify.

    1Reply
  • Bryant Clark
    Member since 2020 · 22 posts · 7 votes
    5y

    @Greg Moore I can appreciate those points. And I'm not entirely opposed to crypto investment. But as others have mentioned it is very speculative and the best recommendation I've seen is play with money you are completely willing to lose. This whole thing feels like the Dutch tulip bubble way back in the day. Crypto is a contract with no tulips :). The underlying tech is important and useful, but I'm not sure that's what people are buying into when they buy a BTC. Between all of the other crypto out there and, to your point, a government being able to declare a "backed" crypto, current crypto seems fairly vulnerable. That said I'm thinking about throwing a nominal amount of money at it to see how it does. Aside from investing is anyone taking crypto as rent payment?

    0Reply
  • Eric Carr
    Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    @Bryant Clark

    I just want to point out that humans are story driven. This is why Tesla's stock price and market cap are gigantic compared to earnings. Tulip bulbs is what uninformed people started saying in 2017, there are many arguments that destroy that. BTC, if you understand how it works and how it fits every definition as a store, you might see.  I am not trying to change anyone's mind, I just cant believe how uninformed and emotional people are when it comes to Crypto. There have been houses sold and I have heard of people taking BTC for rent, however, rent payment's seem anecdotal. 

    Put in only what you are comfortable with never seeing again, like any stock, and even if it goes up 3%, it has beat your bank. 

    0Reply
  • Jeffery Callis
    Rental Property Investor · Knoxville, TN · Member since 2020 · 51 posts · 40 votes
    5y

    @Greg Moore

    For a source for what?

    That Bitcoin is a sham?

    That more people lose money than make money?

    Often people forget that the “credible source” they get their information from has an agenda.

    Look to bybit, bitmex, coin base, binance etc.

    There isn’t a lot of residential interest. It’s commercial investment banks manipulating the price since its is low market cap.

    Don’t get fooled.

    Bitcoin is junk.

    Gold and real estate are the only real currencies of the world 🌎

    0Reply
  • Eric Carr
    Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    @Jeffery Callis

    @Greg Moore

    Greg, as you know, there are billions of dollars flowing into BTC now from people a lot smarter than us or anyone on BP. Over the past few months, gold has seen a record outflow, while BTC and crypto funds have seen record inflow. Let's revisit this thread in 12 months. 

    I have seen it go up thousands of percents since I started accumulating. I have seen nothing like it before - I am also not a weak hand. Anything can happen so lets check back in 12 months. 

    I am not giving anyone advice. But I do feel these emotional arguments are sad. 

    2Reply
  • Jesse M.
    Investor · Chicago, IL · Member since 2016 · 60 posts · 45 votes
    5y
    Originally posted by @Tucker Cummings:

    I’m not a big bit coin or crypto believer, only because it’s still not proven and is still in speculative territory. I just think its hilarious that so many real estate investors are just immediately writing it off without any due diligence. I just can’t help but think back to when I was first getting into RE and friends and family said “you don’t want to get into real estate. I know someone who has a brother whose second cousin’s in-law got into real estate and all they dealt with was tenants, toilets and taxes.” Oh the irony and hypocrisy. 

    99% of the people on here think they are smarter than the average joe. So "writing off" something as new and groundbreaking as Bitcoin comes very naturally to them. Guess it never occurred to them that profiting from a risky asset and then using those profits to invest in a less-risky one could be worthwhile. They will buy in when the institutional investment comes and validates their "newfound appreciation" for immutable and fungible money. Oh, the institutions are already here? Oopsie.

    Put a single-digit percentage of your net worth into Bitcoin and hold it for 10 years. If you don't do it actively, your 401k will do it passively for you, eventually.

    3Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    No way!

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  • Tucker Cummings
    Investor · Raleigh, NC · Member since 2019 · 433 posts · 743 votes
    5y

    @Jesse M.It's kind of a shame that it seems like most Real Estate Investors seem very uppity about investing. I've been noticing a lot of this lately... acting as if we're know-it-alls. In my mind, it seems like we would all be doing a disservice to ourselves not making an attempt to try to learn other investments. 

    Also to your point, I guess it also never occurred to them to take the proceeds they made from a less risky investment like RE and put it into crypto. 

    4Reply
  • Jesse M.
    Investor · Chicago, IL · Member since 2016 · 60 posts · 45 votes
    5y
    Originally posted by @Tucker Cummings:

    @Jesse M.It's kind of a shame that it seems like most Real Estate Investors seem very uppity about investing. I've been noticing a lot of this lately... acting as if we're know-it-alls. In my mind, it seems like we would all be doing a disservice to ourselves not making an attempt to try to learn other investments. 

    Also to your point, I guess it also never occurred to them to take the proceeds they made from a less risky investment like RE and put it into crypto. 

    This forum skews our view. It seems there are a lot of low/middle class people trying to invest in real estate but the reality is that RE is a rich person's game. Crypto is just too high risk for those that already have wealth and want to secure it. I try to make money any which way. 

    1Reply
  • Eric Carr
    Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    @Jesse M.

    Ding! Nailed it in two posts 

    0Reply
  • Nick Brown
    Real Estate Agent · Philadelphia, PA · Member since 2015 · 76 posts · 25 votes
    5y

    Have been bullish on BTC and other crypto since 2015. Like others in the forum I actually used some of those ridiculous gains from the run up between 2015-2017 to put toward less risky assets like RE and index funds. Rode the wave all the way down and all the way back to where it is now. Still bullish on it and think the most recent run-up is only beginning. Just wish I bought more in the downturn!

    2Reply
  • Jacob Sampson
    Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    I consider myself an investor.   Bitcoin is not an investment, it is gambling.  

    1Reply
  • Greg Moore
    OP
    Rental Property Investor · Tampa, FL · Member since 2019 · 128 posts · 166 votes
    5y

    Friends - this has been an awesome thread that has had two lives: the original post in May, and the renewed activity this past week.  What's clear is that people in our BP community have strong views for and against cryptos, Bitcoin, etc. I've learned a lot from the views coming from both sides.  It's helped me exercise caution, set a reasonable amount to invest (that I'm willing to lose), and to be smart about blockchain technology before transferring my first greenback. In other words, this community helped me get what I was looking for. Thank you!

    Based on my research:

    • I'm bullish on BTC, ETH, Blockchain, and DeFi, but overall bearish on alt-coins and stable coins.  
    • I feel the blockchain is BTC's greatest (and probably unintended) gift to us all.
    • I would still rather own Real Estate than BTC, so I love the playbook of the asymmetrical risks of putting a little into BTC and letting the extreme gains fund real estate investments.
    • I would encourage the bears to do more research. We've seen a lot of uninformed views in this thread.
    • I would encourage the bulls to respect that crytpo is not for everyone and we have to respect an individual investor's tolerance for risk.
    • And I want to thank @Russell Brazil for the absolute best comment in the thread earning him some 100 votes by the time this thread dies out!

    And thank you all for your commentary. It's been great! I'm going to unsubscribe from my own thread.  (Too many posts to keep up with!). Maybe I'll revisit it in 12 months with a Real Estate Investor update on how this has played out.  I promise no gloating if the Bulls turned out to be right, and I promise humility and honesty if the Bears turn out to be right.

    Happy investing everyone! May your real estate and your BTC reward you well!

    3Reply
  • Rich Hanlin
    Real Estate Broker · Suwanee GA · Member since 2019 · 16 posts · 6 votes
    5y

    @Greg Moore 20 percent of my total net worth is in Bitcoin/crypto Currency.

    1Reply
  • Jeffrey Holst
    Investor · Chattanooga, TN · Member since 2016 · 676 posts · 543 votes
    5y

    @Greg Moore 1-5%

    1Reply
  • Riley Schaefer
    Bismarck, ND · Member since 2017 · 56 posts · 201 votes
    5y

    Prefer to stick to what I know, what has been a proven path for years.  People always need a place to live!

    1Reply
  • Jason Jones
    Member since 2020 · 4 posts · 1 vote
    5y

    @John Edwards get yourself a hard wallet

    0Reply
  • Luke M.Pro Member
    Rental Property Investor · Brooklyn, NY · Member since 2011 · 76 posts · 17 votes
    5y

    @Greg Moore I’m basically considering it gambling. But it sure is fun. Got in around mid 2017, held through the massive dip, and I’m still up 100%. I guarantee a crypto currency of some sort will be mass-adopted in the future, but there is really nothing showing that it will be Bitcoin. So far, it’s just an interesting store of value, and the institutional investors starting to pile in are encouraging. But still, I feel like it’s like putting a hundy on black at the roulette wheel.

    1Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    5y

    I am not following your logic. You heard one guy say that real estate will lose value, so you decide it is risky. Then you look to cyrpto as a place to put your money to avoid the risk of real estate? 

    1Reply
  • Stephanie Trevizo
    Rental Property Investor · Los Angeles, CA · Member since 2018 · 49 posts · 46 votes
    5y

    I invested some and have been happy. My sister and brother-in-law own a cryptoexchange and they always tell people to only "invest what they are willing to lose", so that's always been my approach. They do see a lot of people who lose money because they didn't know how to store it correctly, so that's important. 

    1Reply
  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    5y
    Originally posted by @Greg Moore:

    After watching a YouTube video from Ken McElroy stating 2020 is a wash, 2021 is the time to save up, and 2022 is likely the time to buy (when properties shift from motivated sellers to foreclosures to REO) I decided to redirect some recent Real Estate proceeds out of a 1031 into BTC.

    My question is how much Cryptocurency do you personally feel is the right percentage for your investment mix (that is, if you have crypto)?

    Ken is a good guy. I’ve spoken with him a few times.  He’s written some decent books.

    But Crypto and real estate aren’t even in the same class of investments. Crypto is still in wild Wild West territory... with regulation unsure and all types of other risks.  While real estate is an established investment asset, that is local, where you have more control, and therefore with MUCH less risk.

    There are thousands of cryptocurrency, Bitcoin is only one.  Ethereum, Litecoin, Cardano, etc.  

    investing in crypto is like investing in penny stock.  It’s big risk, so only invest what you’re willing to lose.

    I invested a small amount of play money a few years ago.  If it gets to $10 a coin, I’ll never have to work again and can buy an island.  If I lose it, it’s no big deal.



    1Reply
  • Anthony Marin
    Rental Property Investor · Newark, NJ · Member since 2017 · 88 posts · 75 votes
    5y

    @Greg Moore

    I am slowly moving funds to BTC.  I think the right allocation is 1% of your net worth should be in Bitcoin.  That's not my opinion but I stole that from Chamath Palihapitiya who is easily one of the most successful investors of the past 10-15 years.  I advocate to diversify but the vast majority of my net worth is in real estate.  Here is my allocation - 80% real estate, 15% equities, 4% bonds and 1% Bitcoin.

    1Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Greg Moore Nope. Still don’t even understand what it is and I won’t invest in something I don’t understand. RE I understand!

    1Reply
  • Aaron Taylor
    Olathe, KS · Member since 2018 · 148 posts · 207 votes
    5y

    Let me say right off the bat, that I’m not 100% sold on bitcoin. Pretty skeptical honestly. However, I also realize when there is a chance for a very high asymmetrical return.

    There are major issues in our financial systems around the world that are going to need to be sorted out in the next 10 to 20 years.

    Is bitcoin the answer? Probably not. But not having a small investment in it would also be dumb, in case I’m wrong, because it could go to a million dollars a coin in the best case scenario. So worst case it goes to zero, best case is a 50x gain.

    It’s kind of like gold, it’s a hedge against the dollar. Does anyone think that the US will start being responsible with their budget? I don’t, hence why I want a hedge. I would not put that much into it though, because it would only take a small investment to make a huge gain in the scenario it actually does get used.

    2Reply
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