Here is a quote from Vitalik Buterin curtesy of Justin Bram
There is a paradox here where real estate cannot appreciate in real terms and remain affordable to the masses. This throws a spanner in the works of my real estate investments and home ownership. My Dad told me to “invest in land because they’ve stopped making it” and I’m sure some readers have heard similar adages about owning their own home. This is generally accepted dogma due to the steady, reliable appreciation in house prices over the last century. Property values have increased historically due to economic growth and currency devaluation, population rise causing greater demand, and the limited availability of new homes. For investment purposes rental properties can provide a steady income in addition to the capital appreciation in house value. As living costs rise, so do property values and rental incomes offering a hedge against inflation. Additionally, there is no easier way for the average person to gain leverage and most economies have a mature market of lenders eager to offer mortgages at competitive rates. In the UK you can currently borrow 4-5x your salary with 10% down at around 4.5% APR. If you are purchasing a rental property you tend to need a greater deposit of around 25% of the purchase value of the home. So it’s relatively easy for everyday people in western economies to borrow six figures and invest in real-estate. It’s also been normalized far more than any other form of investment like stocks, bonds and god forbid crypto. But is real estate really a good investment?Everyone needs a place to live, making affordable housing essential for social stability. Does affordable mean that we have to own our homes? Not necessarily but it still needs to be affordable to renters creating a relative cap on rental incomes in real terms. House prices have increased at an exceptionally higher rate than earnings in the UK and other economies.
This might be because there’s been a shift in home ownership to rental properties. Increasing prices make it harder to get on the property ladder creating less home ownership. So who is buying the properties and pushing prices up? Investors. If there are more renters then they need to be renting from someone which means there must be more investors holding multiple property portfolios. Rent is increasing at around 10% a year currently which is higher than inflation CPI figures which is somehow reported at 2.8%. Can this continue forever? For real estate to be a good investment, its value must increase in real terms, outpacing inflation. However, if real estate values rise in real terms, affordability becomes more and more of a problem. It becomes harder for new buyers and renters to afford housing. If property values continue increasing faster than wages, the gap between property owners and non-owners widens, leading to greater economic inequality. In most families both partners work already, we have a “cost of living crisis” in the UK, it’s difficult to see where the room for future growth is. Can rents double in real terms over the next couple of decades? If not then how can real-estate investment provide sustainable returns above the rate of any devaluing currency? In my opinion, while our homes and real estate investments will likely go up in monetary value over the coming years, the value add will likely be a reflection of inflation, rather than real asset growth, due to limitations of affordability.
$60k BTC/USD is the key level here. We’ve lost the range and unless we can promptly get back above that level things aren’t looking great. It’s certainly not a horrendous chart and if it reclaims $60k then a test on the upper bounds and previous ATH seems likely. There’s support at $52k and $42k both of which haven’t come into play… yet. If it get’s to $42k I think it might be sell a kidney time, although there are likely enough market participants looking for a similar entry that this seems too good to be true. ETH/BTC is holding above the significant 0.05 level and is currently trading at 0.054. With Ethereum ETF’s imminent, and most of Wall Street thinking it’s a fake Bitcoin, this is still my strongest conviction bet. I believe a staked ETH position will outperform as it evolves into a global platform for decentralized data and computing over the next decade. TON is a relative newcomer to the Coinmarketcap top 10 but with Telegram reaching nearly one billion users and a fully functional smart contract platform (built around FunC which is like C but fun), it is doing well and has further potential. Currently trading at $7.15, I have no exposure at this time but am going to be keeping an eye out for any ecosystem opportunities which could capture attention and TVL. Social links are below and if you enjoyed this newsletter I would appreciate it if you could share this content
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