First of all, I'm not saying that you shouldn't buy any Bitcoin (CRYPTO: BTC). Cryptocurrency could be a smart place to park a small percentage of the money you don't need for living expenses or your own retirement, but it's far from a sure thing. On the other hand, if you have some dry powder you're looking to put to work and want growth, income, and low volatility, here are two real estate investment trusts (REITs) you might want to consider.
A different kind of tech investment
Digital Realty Trust (NYSE: DLR) is a REIT with some characteristics that might resonate with Bitcoin investors. If you're unfamiliar, the company owns and operates data centers worldwide, and the exponential growth in the volume of data flowing around the world has created a surge in demand for this type of property.
Digital Realty owns 290 data centers and is one of the largest REITs of any kind. The company leases space in its properties to more than 4,000 customers globally -- and top tenants include Facebook, Oracle, and LinkedIn, just to name a few.
Since going public in 2004, Digital Realty has not only generated a 2,450% total return (about 21% annualized) for investors but also increased its dividend every year. With the gradual rollout of 5G infrastructure, as well as the increasing prevalence of data-heavy technologies like augmented reality and autonomous vehicles, there's no reason to believe demand will slow down anytime soon.
The need for infrastructure isn't going away
Continuing the tech-focused theme, another REIT that could be worth a look for Bitcoin believers is Crown Castle (NYSE: CCI), an infrastructure REIT that owns and operates communications towers, fiber-optic infrastructure, and more. The company has a massive portfolio in the U.S. that includes more than 40,000 communications towers, about 80,000 miles of fiber-optic network, and 80,000 small cell nodes.
Crown Castle is another excellent play on the increasing volume and sophistication of data. The number of connected devices in the U.S. is rising rapidly, and while 5G technology is available in some areas, it isn't exactly universal just yet.
Mobile data usage in 2019 was 96 times greater than it was a decade earlier, and the COVID-19 pandemic likely accelerated this growth even further. The rapid rise in data consumption is creating a need for denser wireless networks, particularly through the small cell nodes Crown Castle is focusing on. This type of node is expected to grow at an annualized rate of at least 20% through 2024, giving Crown Castle tons of runway for growth.
The Millionacres bottom line
Bitcoin can certainly be exciting, but it can also be quite a roller coaster ride. In 2021 alone, the cryptocurrency rocketed to a high of nearly $65,000 but has since lost half of its value. In addition, Bitcoin isn't an income-generating asset (I know that there are some new "Bitcoin savings accounts," but that's not the same thing).
Even the most optimistic Bitcoin experts agree that Bitcoin is a good place to put 1% to 5% of your money if you believe in cryptocurrency long-term. With an allocation like this, if Bitcoin skyrockets to $1 million -- like some experts think it will -- it will still produce fantastic returns for you. On the other hand, if it drops like a rock, this allocation will be small enough not to be devastating.
These REITs are smart and responsible investments you can make while taking advantage of major technological trends. However, these are more appropriate places to put the money you'll eventually need.