The meteoric rise of Bitcoin reveals stark contrasts in asset value growth since 2017
For South African property buyers with an eye on Bitcoin, today’s housing market is a revelation. A property purchased in 2017 for R1 million would have cost around 12 Bitcoin (BTC) at the time. Fast forward to today, and the same property’s value has effectively dropped to 1.44 BTC, a staggering difference highlighting Bitcoin’s unprecedented growth over the past seven years.
South African house prices have long been considered affordable compared to other global markets, yet when measured in Bitcoin, they are even more accessible. This reflects Bitcoin’s deflationary power since 2017. The cryptocurrency recently broke the $70,000 mark, reaching record highs in several currencies, though the South African rand’s recent strength against the dollar has muted some of these gains.
For comparison, if a buyer had invested R1 million in Bitcoin rather than property back in January 2017, they would hold approximately 15.9 BTC today—a holding now worth an impressive R19.5 million. This assumes a cash-only purchase for simplicity, although many buyers rely on bank financing, typically providing a 10% down payment with additional conveyancing and transaction costs. Accumulating savings for this down payment remains a challenge for many young buyers in South Africa.
Real estate investor Jonny Reck, who specializes in strategies to acquire property using Bitcoin, points to the potential of building wealth through cryptocurrency. “Maybe it’s time to save for that down payment in Bitcoin instead of dollars,” he suggests. Reck advises allocating a set amount in Bitcoin each month over five years, a practice that could make a significant difference in home affordability. “Setting aside an amount in Bitcoin each month for five years may be the difference between comfortably affording a home versus being priced out of the market,” Reck explained.
Reck’s approach involves leveraging rental property cash flow, net of operational costs, to acquire Bitcoin regularly. Known as “dollar-cost averaging,” this method ensures Bitcoin is accumulated consistently, regardless of market price fluctuations. In some cases, he recommends using accumulated home equity to buy more Bitcoin, a strategy that has proven lucrative as the asset has grown.
Bitcoin’s performance in recent years has been nothing short of extraordinary. Since early 2017, Bitcoin’s price has increased by a factor of 81, cementing its status as one of the best-performing assets over the last seven years. By comparison, South African property prices have only appreciated by about 20% in that same period.
In a further illustration of Bitcoin’s impact on asset values, consider that a South African house valued at R1 million in 2011 would have cost about 1,517 BTC, which today would be worth an astounding R1.87 billion. These numbers underscore Bitcoin’s deflationary power, particularly when viewed through the lens of historical asset price trends.
Ethereum (ETH) has also shown impressive growth, though at a slower rate than Bitcoin. A R1 million property bought in 2017 would have been worth around 242 ETH, a figure that has now dropped to 27.5 ETH, equivalent to nearly R1.2 million today. Ethereum’s value in South African rands has surged nearly 19 times over the same period, providing a significant return compared to the modest 20% growth in average South African property values.
The rise of cryptocurrency is reshaping perceptions of wealth and investment, especially as it offers an alternative means of acquiring traditionally high-value assets like real estate. With Bitcoin and Ethereum continuing to surge, the allure of cryptocurrency as a wealth-building vehicle in property ownership remains strong for South Africans.
