Cryptocurrency in Pakistan has been an effective investment option for the last few years. On the other hand, stock and real estate have been popular investment options in the country for over decades. With every market heating up, many concerns and skepticism are rising. With every business, the risk is involved.
It is possible to become a millionaire by investing in cryptocurrency, yet there is a significant risk; you might lose everything if you have invested irrationally. Likewise, the real estate industry promises revenue and profits, but land scams and frauds are also common in Pakistan.
The stocks industry needs strategy and understanding for investing a little loose investment, and investors lose millions. Every business possesses risk, and people are often confused among the three. Some prefer real estate as it provides a high degree of control linked with property, while stocks are preferred for low capital requirements. Cryptocurrency carries lots of potentials, and it is considered as currency of the future.
Here we have mentioned a detailed comparison of cryptocurrency vs real estate vs stocks, including its pros and cons, so that the investors can make an informed decision with their investment.
What is cryptocurrency?
Cryptocurrency or cryptocurrencies are the digital currencies used to purchase different services and goods. Many people use them to invest in trade to generate more profit.
Many coins are used for investment; however, the most well-known crypto is Bitcoin. It was created in 2009 by Satoshi Nakamoto. Bitcoins are generated by “mining .”Mining involves computer software solving complex mathematical problems. Once the person solves the problem, they are rewarded with Bitcoin.
How to buy cryptocurrency in Pakistan?
As digital currencies are new in Pakistan, many people do not know how to invest in crypto. Luckily, it is pretty simple, and investors can buy coins through different payment channels, including PayPal, Jazz cash, easy paisa, direct bank transfers, etc.
Cryptocurrency price in Pakistan:
The current price of cryptocurrency is $0.002034 per PAK.
Pros and cons of investing in cryptocurrency:
Cryptocurrency is a decentralized currency with no government authority. Cryptocurrencies are not regulated or controlled by banks like PKR, Dollars, or Riyal. Economic principles govern digital currency. Therefore, no external party can track or monitor any transaction you are doing. The government cannot control or manipulate the supply of coins. On the contrary, the bitcoin/cryptocurrency can never be affected by inflation as there are always limited coins available.
Cryptocurrencies use blockchain technology, and all the transactions are stored in blocks of data added to the existing blockchain. It is quite a convenient method for those who want to complete transactions without having to reveal their identity.
Every transaction is permanently stored in the blockchain and available to the general public.
4. Less barriers – Low costs:
Bitcoin is divided into smaller units which are known as Satoshi’s. Investors can buy coins for as low as 10$.
5. Ascending trend of price:
With the rapid increase of interest in bitcoin and other digital currencies, many people are joining the trend and choosing to share the pie. Moreover, it is speculated that prices will increase consistently, which makes it a long-term asset. For instance, the price of bitcoin is anticipated to cross 100,000$ in a few years ahead.
1. Non-tangible asset:
Cryptocurrency is a non-tangible asset; you cannot hold the bitcoin in your hand. It opens the door to cyberattacks and many other cybercrimes that can endanger investments. One another downside of crypto is that it is precarious.
So, investors must pay keen attention to fluctuation and invest strategically. Cryptocurrency does not offer dividends or rents, so there are no options for passive cash flow opportunities. These factors usually contribute to the fear of crypto being a fuzzy investment option.
Real estate in Pakistan:
Investment in real estate still stands as the most viable options present. One thing which cannot be denied in real estate investment is that the real estate sector cannot vanish from the earth.
There are a variety of reasons to put the real estate sector. Let’s look at the pros and cons of investing in real estate in Pakistan.
Pros and cons of investing in real estate:
1. Fast value appraisal:
Real estate adds value addition refers to the idea that asset value can be increased by making minimum changes. Real estate links in the best manner to the addition of the value. For instance, suppose someone has vacant land; it will have value. After some time, the owner constructs a commercial or residential building over it then the value will be added to it as the owner will be taking rent from it or running a business.
2. Tangible asset:
Real estate is a tangible asset prioritized while exploring different safe investment options—property, whether commercial or residential, is more resilient to exterior economic fluctuations.
Furthermore, the assets also act as security for the future. In Pakistan, where the economy is consistently fluctuating, real estate is considered the safest type of investment. Value diversification is another essential feature that pulls real estate ahead of stocks and digital currency.
3. Less risks of instability:
As mentioned above, the real estate sector in Pakistan poses a minimum risk of instability in ever-changing economic conditions. Digital currency is symbolled with high volatility, and the risk of depreciation in the values is expected.
On the contrary, the real estate market is more resilient to volatility and external economic shocks. The prices mostly go upwards, and devaluation is rare in the property industry.
4. Regulated by the government:
The government regulates the real estate sector; therefore, it is easy to challenge any fraud or scams in the courts and government platforms. Real estate is always under government protection, offering a secured investment option. In property transactions and deals, parties sign affidavits, guaranteeing transparent transactions, so the person can be held accountable if proven wrong.
The real estate business is booming in Pakistan, and we may see hundreds of real estate companies advocating the benefits of investment in properties. However, there are a few drawbacks attached to it. Let’s have a look:
1. Quick trade is not an option:
Real estate is not a liquid asset; unlike stocks, you cannot buy and sell it anytime. Even a tiny piece of land often takes a month to trade. It can take years to find a suitable buyer for big properties; therefore, real estate is often considered a long-term investment option than stocks and other investment opportunities.
2. Costly maintenance:
Real estate is costly to maintain and buy. You can invest from as low as 10 dollars in stocks and digital currencies, but for real estate, you might need thousands or millions to start earning. Therefore, property investment is sometimes considered an elite class investment option only.
3. Stocks in Pakistan:
The stock exchange of Pakistan – commonly known as the Pakistan stock exchange, is a trading market for shares. Many people in Pakistan prefer to invest in stocks as it generates remarkable revenue quickly. Most importantly, it is a liquid investment, and you can buy and sell it whenever you want.
Pros and cons of investing in Stocks:
1. Easy to buy:
Stocks in Pakistan are pretty easy to buy. Anyone can buy shares from any company from the stock market. You can purchase them through a broker, financial partner, or online. Once your account is set, buying stocks only takes minutes. Business owners can invest in stocks through their business conveniently.
2. Minimum investment required:
It is the best feature of the stock market, and there is no minimum or maximum limit to investing in stocks. You can invest as low as 100 rupees or up to thousands or millions. However, it is advised to start from a small amount and only invest strategically.
3. Liquid money:
The stock market in Pakistan and worldwide let you sell your stocks at any time as it is a liquid investment. The transaction cost is pretty low. Stocks are the best way to save money as you can sell them in emergencies.
1. Risky investment:
Stock, no doubt, promises hefty profit, but it also involves lots of risk of high volatility. Eventually, it makes stocks a risky investment. Moreover, the stock is a liquid investment, you can buy shares in the morning and sell them in the evening, but to earn sound revenue, stocks are a good choice when the investor buys and leave them for a long time.
2. Knowledge of stocks:
Knowledge of stocks is essential: You need sound financial knowledge and analytical skills. Before investing, background knowledge of how to invest in stock in Pakistan is extremely important. If you are new, you must depend on external sources like brokers who charge hefty fees for the consultation.
Stocks, real estate, and cryptocurrency all possess lots of potentials to generate revenue. Cryptocurrency is trending worldwide, but still, it is not legal in Pakistan. Stocks offer easy ways to invest; however, Pakistan’s stock market has become riskier concerning investment due to the consistently changing situation of the economy.
However, investment in real estate is the least risky of all. It is resistant to external challenges. Real estate is not a liquid asset; it is a tangible asset that has proved to be the largest worldwide asset. With a suitable investment, your property value will continue to grow. The real estate industry offers versatile options to invest and earn.
Any government does not control cryptocurrency transactions, so there is no third party’s involvement, making it a transparent and secure investment. Stocks are riskier but offer diverse investment and instant profit-making options.
In the last, there is no answer to which one is a better option; it all comes down to what type of an investor you are? What matters most is that you should never jump into any investment before properly researching and having sound field knowledge. An investment option that is a hot trend does not make it suitable for you.