Bitcoin as a new variable in global markets will have a drastic effect on other market prices the larger it grows.
People used to own real estate because of its utility value, which is characterised by the fact that you can live in it or use it for production. Today, however, it serves the world as the primary asset for. A former function of money that is no longer possible due to decades of monetary inflation that has decimated people's purchasing power. This development coincides with, when U.S. President Richard Nixon announced that the U.S. would end the convertibility of the U.S. dollar into gold.
Overall, bitcoin is likely to replace real estate as one of the elementary assets in the global financial system. This would also fundamentally change the cost of housing, lending and interest rates, because all of these variables greatly influence each other. In the following I will try to explain in detail how these changes might look like.
In general, housing would be cheaper because the proportion of financialization would be significantly lower and it would become cheaper over time due to deflation. The risk-free interest rate for bitcoin is related directly to productivity. Since bitcoin is finite, the value of individual units increases as human productivity grows. There is a risk of not participating in the increment in the value of bitcoin in the event of a loss. A greater productivity of the economy increases this risk. The interest rate on a loan would likely be the deflation rate plus a risk premium to compensate for potentially losing bitcoin.
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