We May Have Missed the Chance to Make It Big in Real Estate, Yet Here We Are at the Forefront of Bitcoin’s Digital Property Revolution

• As decentralized finance grows, this modern approach to property ownership could redefine wealth accumulation for future generations.
• As the U.S. election potentially stabilizes the market, the integration of institutional funds into Bitcoin may bolster confidence and further solidify its status as a viable investment.
• The increased activity around Ordinals shows innovation in the space, potentially driving more interest and investment in Bitcoin.

Imagine being born in the U.S. in 1955. In the aftermath of World War II, the U.S. rises as a global superpower with a gold-backed currency. Two decades later, the U.S. government decouples the U.S. dollar’s peg to gold, leading to significant currency volatility.

By the time you graduate from university and enter your professional career, the economy is still quite volatile. But, as you get into your professional prime in the early 1980s, you are able to purchase your first home. You made their greatest investment ever, along with a massive mortgage.

The key to building wealth

You’ve probably seen memes about the baby boomers getting famously rich by purchasing their primary homes and not selling them for over 20 years. This isn’t fiction; it’s fact. And your wealth goes “boom.”

But for younger generations, the path to prosperity looks very different. Despite what skeptics may claim, Bitcoin (BTC), not real estate, is the key to building wealth in the digital age.

The boomer generation coincided with the U.S. demonetizing gold  as a reserve to the U.S. dollar. The peg was abandoned in 1971, and from there, the U.S. dollar has proceeded to progressively devalue over time. As a result, other asset classes have been “monetized” — the main one being real estate.

As an example of this monetary premium, in 1985, the U.S. House Sales to Income ratio was 3.8, meaning a median house was worth 3.8 times the average income. As of January 2022, that ratio was 5.8.

Better money

Many, if not most, purchased homes in the U.S. not because they wanted to live in them but because they held their value better than U.S. dollars. The constant debasement of the currency forces everyone to become an “investor” because you can’t keep the value of your savings in dollars.

This pushes people to “invest” in real estate and purchase stocks and bonds. All those instruments have maintained value better than fiat currency. However, these traditional assets pale in comparison to the potential of Bitcoin.

Critics may scoff at the idea of digital property, but they fail to recognize that Bitcoin’s unique properties make it a far superior store of value.

Bitcoin has a lot of attributes that make it better money. Importantly, it has a fixed supply of 21 million units. These units get programmatically released into the market as network incentive payments to computers that contribute their hashing power to protect the network called miners.

Another interesting design decision is that the size of this incentive payment gets reduced in half approximately every four years. This event is called “The Halving,” and it is an important part of Bitcoin’s culture and market structure.

Why this halving is different

Since Bitcoin’s inception, there have been three halvings. Every single one to date has introduced a supply shock in the markets, which, combined with positive macroeconomic backdrops, have led to price surges.

Blocksize rewards—or the Bitcoin payment paid to miners by the network upon successfully completing a block—started at 50 BTC and moved to 3.125 BTC on April 20, 2024. This reduction in reward payments will have ripple effects across the mining industry and markets in general, as it has every time before.

What’s particularly interesting about this halving event is the influx of institutional investments through newly approved Bitcoin spot ETFs, with nearly $12 billion in inflows  since launching a little over two months ago.

While doubters may dismiss Bitcoin as a passing fad, the growing institutional adoption proves that it is here to stay. The smart money recognizes Bitcoin’s potential, even if the naysayers refuse to see it. Also worth noting is the revenue diversification miners will see from Ordinals inscriptions.

It’s also significant that the Bitcoin halving event is landing during a U.S. presidential election year. According to Marshall Nickles’s 2004 study  on “Presidential Elections and Stock Market Cycles,” we can expect relative financial market stability and growth during the latter years of presidential terms.

This, coupled with the liquidity infusions typically associated with election years, means the halving will anchor the increased price for Bitcoin through the combination of a supply shock with an anticipated boost in market liquidity.

Together, these elements represent a negative shock in supply and a positive shock in demand. Economics 101 tells us these are potent ingredients for a Bitcoin rally.

(Digital) property moguls

As society’s understanding of Bitcoin grows, so will its market size and value. More people will study and learn about Bitcoin, and more will start to understand that Bitcoin is better money. As more people realize this, Bitcoin’s monetary premium relative to assets like real estate or gold will grow.

We may have missed our parents’ boat to become property moguls. But, by creating digital scarcity, Bitcoin created digital property rights. If we are right, our children will talk about us transacting in “full Bitcoins,” as history books talk about settlers coming to the United States and claiming their land for pennies.

To those who remain skeptical of Bitcoin’s future, I say this: open your eyes to the revolution that is unfolding before us. Bitcoin is not just another speculative asset; it is a fundamental reshaping of the way we understand property and value in the digital era.

Skeptics will continue to doubt Bitcoin, but the smart money understands that this digital property revolution is just getting started. Those who fail to grasp this reality risk being left behind as Bitcoin cements its place as the foundation of a new financial order.

It’s time for investors to decide: will they cling to the vestiges of the old system or embrace the digital property revolution that Bitcoin represents? The choice is clear, and the opportunity is now. Don’t miss out on the greatest wealth transfer in human history.

Disclaimer: The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.