Should You Ever Trade Bitcoin For A House?
Mansions and Lambos. Those are the things to buy with bitcoin.
At least, that is what all the "not rich" people say to do. People who don't really understand wealth. The things that make you look wealthy. You can take all your bitcoins and live the card-ass-ians. (which is not true, their show is paying for a lot of what they do.)
If you have 100s of bitcoins, then you probably don't have to worry. But, what do you do if you only a few bitcoin, or just a fraction of a bitcoin?
If you are like most people, you are probably thinking of getting a house. Finally owning your house outright. Real Estate has always been a safe investment, right?
But, is it really? Is it a good use of your bitcoin?
Bitcoins per house
Over the past 5 years, if you look at a chart, the number of bitcoin per house is almost flat. From 40 down to about 7 (twice)
And, we will probably bounce around 7 bitcoin/house for the rest of this year. So, buy now? Or, is that turn down at the end of the chart, the precursor that it is going much lower?
Bitcoin's future price
Bitcoin is going to infinity, in dollar terms
Or, it is probably better to say, that the dollar is going to zero. Especially compared to bitcoin.
The dollar is going to zero anyway. And bitcoin, may or may not be helping it along its way.
So, if we are just looking at bitcoin, the longer you wait to spend your bitcoin, the cheaper everything else will be. Or will it?
Bitcoin lost vs housing in 2022-2023, as the prices of a new house went through the roof with almost 0% loans.
Further, we are looking at a very uncertain future. If we wait, are there things we won't be able to buy? Or won't be able to use if we did buy them? America's deteriorating infrastructure means a Lambo might not be able to drive on the streets. America's deteriorating society means a Lambo will get you lots of angry looks, as people hate/blame the rich more and more. So, a Lambo will just be a giant paper-weight parked in a garage.
China may stop shipping goods to America, completely changing the cost structure of everything in Wallymart. That Microwave might cost a few satoshis in China, but you can't get one here.
A McMansion's Future Price
Over the long run, McMansion's prices will drop to zero. Demographic decline will have house prices falling. And the actual uselessness of having an overly large house, that isn't big enough for the functions of a mansion but is mostly just wasted space, will make it even less desirable as energy prices continue to soar.
A McMansion's only future prospect is if can be divided up between roommates. Or basically making it a bunch of little apartments inside. The majority will be left abandoned.
And this will be playing out alongside the degradation of cities. The infrastructure crumbling. The crime increasing. Power and water becoming unstable. Jobs becoming scarce. Stores closing. Cities becoming a place only those who can't leave live in.
A McMansion will be a very poor investment over the long run.
Where Is the Inflection point?
Suburban house prices will drop and drop and drop.
Bitcoin's price will go up and up and up.
However, you need a place to live.
And most people want a place to live that they own.
How does one balance all of these things?
My advice has always been to get a homestead. Its value will be that you can feed yourself, no matter what the rest of society does.
However, lets look at getting through the next few years.
Lets say you are a typical bitcoin HODLer with a few bitcoin and a job in a city.
In this next (sorta now, but really into next year) bitcoin bull run, when is a good time to buy your house?
Well, probably next year, in the fall.
At that point, bitcoin will be approaching $300k, and house prices will have actually started plummeting. At that point you will get the most house for your bitcoin. Probably less than 1 bitcoin/house (down from 7 today)
If you are really thinking of getting a suburban house, instead of paying a high price in the city you are at, think about how long you can live on the difference between buying a high priced house in the big city, and what you could get in a smaller town. That difference will probably mean you could live without that job for a decade.
If you think outside the box. If you think about what is really important. You may find paths that are much better for you. Cheaper and better.
You may have been struggling all your life to afford a house, and your sites were on buying your own house, and now, you may be able to retire. Buy a house, somewhere cheaper, and retire. Such is the power of bitcoin.
bitcoin/house chart from https://www.pricedinbitcoin21.com/chart/consumer-goods/MSPNHSUS