Bitcoin versus home prices: Here's how the crypto has performed against the residential property market over the last 5 years

• Point2, a real estate platform, analyzed the return on investment in bitcoin vs. US homes between 2017 and 2021.
• The company assumed an initial investment equal to a 20% down payment for the median home in each of the 100 largest US cities.

A person who put a down payment on a home in Manhattan five years ago would lose money if they tried to sell that place today, while an investment in bitcoin would have allowed them to rake in nearly $20 million.

Those are part of the findings of a recent analysis by Point2, a Canadian real estate platform that compared returns for an investment made in 2017 in bitcoin or in US residential real estate.

Prices for the cryptocurrency and US homes have each climbed since 2017. However, "bitcoin price appreciation blew home price increases out of the water," the company said.

Bitcoin has piled on roughly 6,100%, trading at $61,900 at the start of November from around $998 when trading in 2017 got underway, according to CoinDesk data.

Meanwhile, the median sales price of houses sold in the US had increased by 29% in the same period, to $404,700 in the third quarter of 2021 from $313,100 in the first quarter of 2017, according to figures from the US Census Bureau cited by the Federal Reserve Bank of St. Louis.

"The fear of taking big risks is what has kept many from investing," and "as many of the people reading about home prices and bitcoin can attest, regret can truly sting," the platform said in a late November statement about its analysis. ​​

To compare the two assets, Point2 analysts assumed an initial investment equal to a 20% down payment for the median home in each of the 100 largest cities in the US cities, based on 2017 prices.

In the highest-priced residential real estate markets in the US, a 20% down payment in Manhattan in 2017 would've run at around $290,000, while San Francisco would've required $250,000. Translated to crypto, that down payment would've bought 301 bitcoins and 260 bitcoins in those respective cities.

In "the spirit of regretfully looking back," Point2 found that the big winners would've been bitcoin investors in Manhattan and San Francisco.

"Had they decided to invest in bitcoin an amount equal to the median down payment in 2017, they would have had more than $18 million and $16 million in their crypto wallets today," the company said.

To be sure, Manhattan was the biggest outlier. The NYC borough logged the "most spectacular gap" between real estate and bitcoin earnings. Home prices dropped by 31% over the five-year period to a median price of $1,000,000. "[Someone] who invested in a home in 2017 would lose money if they tried to sell it now," it said.

At the other end of the list, Point2 weighed a 2017 home down payment of $6,552 in Detroit against a crypto investment of 7 bitcoins. Over the five years, the person in Detroit would've made about $45,000 in real estate gains and about $680,000 in bitcoin.

Real estate is the more well-established investment choice, but bitcoin has "come a very long way since its humble beginnings," said Point2.

"In hindsight, not investing in bitcoin, and massively at that, seems like a huge mistake. However, factoring in the asset's high volatility brings things back into perspective," it said. "That's because investing in such a high-risk asset is not immediately and obviously advantageous to the majority of people."