This is an opinion piece by Konstantin Rabin, a writer specializing in finance and technology.
Good old bitcoin, the ancestor of cryptocurrency, is increasingly being used as a reliable store of value for those looking to move away from the more established asset classes, as it continually proves to be a solid hedge against inflation.
In fact, it’s something I’ve been doing for a while now, and in this article, I’ll explain why I allocate some of my wealth to bitcoin and how I see it as ideal for preserving my value. net.
Why allocate part of your wealth to Bitcoin?
Despite the volatility and fear that is usually posterized when talking about bitcoin as a revolutionary investment vehicle, there is a lot to be said for why it is a valid competitor in this market. It should be noted that no investor worth their salt would tell you to put your life savings into crypto, but there is great upside potential for those looking to earn long-term returns or preserve some of their wealth. in this way.
Let me mention a few of these benefits that make this bitcoin investment worth investigating:
- Alternative store of value: Bitcoin is as good as it gets when looking for a store of value outside of third-party manipulation. Being decentralized means it bypasses many aspects of the bureaucracy and fees that come with leaving your money in the hands of financial institutions. As a result, it is not subject to the same inflationary pressures that are so prevalent with businesses operating in the government-controlled fiat currency system.
- Long-term growth potential: There is no doubt that bitcoin’s value is extremely volatile in the short term, but its long-term trend has always been quite bullish. The idea of HODLing comes into play here, as you will only truly be able to see the true value of your investment by ignoring the spikes and hanging on for life.
- Diversification: As I’ve said before, investing in bitcoin doesn’t mean you throw all your hard-earned eggs into the chaotic basket that is crypto, but you can provide much-needed, forward-looking diversification for your investment portfolio. As the price of bitcoin is less and less correlated with that of traditional assets, like stocks and bonds, adding some of these digital coins to your portfolio can help spread the overall risks your investments might face from the old guard. In fact, what we’ve seen over the past few years is that bitcoin has become a new sort of semi-safe haven asset class that many investors are flocking to as investment vehicles come to the fore. ancient and fiat currencies are under pressure.
- Accessibility: This goes down two lanes. On the one hand, investing in bitcoin becomes easier to do, with many platforms and exchanges now offering an easy and secure way to buy and hold your BTC; while at the same time, it has never been easier to liquidate that asset and get cash on hand when the need arises. This marks a huge point in the stock, bond or real estate markets, which are still plagued by liquidity problems; especially in times of large-scale financial instability.
In the long run, spending part of your income on BTC is unlikely to make you poor. On the other hand, not allocating anything to BTC could ruin your prosperity, especially in these uncertain times where banks can fail without warning, inflation still seems to be on the rise and several countries are seeing their fiat currencies turn into toilet paper.
Why I don’t buy or mine BTC
In pursuit of acquiring bitcoin, there are always obvious channels to access some form of cryptocurrency exchange or peer-to-peer marketplace and simply exchange fiat for BTC. While there is nothing wrong with this approach, and it may be the simplest and perhaps the only option for many people, it is, in my humble opinion, not the best way to get your coins for wealth preservation.
You could instead go the miner route and spend a big fortune buying all the necessary equipment to try and get BTC that way, but nowadays with the with the average mining cost per coin being over $30,000 in many countriesyou’re more likely to end up with nothing long before you’ve mined your first coin.
So what would I suggest? Win it.
Of course, not everyone can convince their boss to pay them in bitcoins, but many people these days have a side hustle that can easily be used to generate digital dosh. Five years ago, offering your customers the ability to pay in crypto for your services was a non-existent concept, but today it is obvious. Right now, a lot of my clients, especially those operating in the online world, are very keen on paying for services through crypto. While most of them like to use stablecoins such as USDT, you can easily flip them over to BTC and keep filling your Bitcoin wallet.
Another notable online activity I participate in to stack BTC is for over 18s. No, I don’t mean OnlyFans. I do work in and around the gaming industry and also like to gamble a little once in a while, but I only play for BTC.
Bitcoin Betting Sites Are Gaining Ground Lately, thanks to their ability to protect privacy, offer offers (eg bonuses, commissions, etc.) and general improvements over the annoying bureaucracy inherent in fiat betting sites. Obviously, I don’t recommend anyone to play the game, but it’s something I enjoy every once in a while, like when my favorite UFC fighter jumps into the octagon, because it adds a bit of excitement watching the fights, and obviously the winnings are added to my BTC Wealth Preservation Fund.
My BTC Heritage Preservation Strategy
You might be wondering why I am hammering on bitcoin and not paying much attention to the rest of the crypto pack. Frankly, like most top tokens follow bitcoin price like a donkey chasing a carrot, I generally don’t diversify things or allocate a portion of my crypto investments into other major coins and tokens. Don’t get me wrong, I believe some of the cryptocurrencies are useful, but since bitcoin is what determines the value of many of the top dogs on the list, sticking with BTC as my bullion coin has sense. (For those looking to branch out into other crypto projects, I have a piece of advice: stay away from memes and shitcoins.)
Now let’s get down to business. Here are my tips for preserving wealth through bitcoin based on my own strategy:
- Plan: Whether you’re investing with fiat currencies you earn through day labor or getting paid directly in crypto through your own projects, make sure you have a clear goal. Set yourself certain annual or even quarterly amounts that you would like to achieve and do your best to achieve it.
- Don’t Panic: Always work to increase your BTC holdings and be ready to HODL until the kingdom comes. Don’t pay much attention to fiat value and don’t panic selling just because you see some of those crazy price swings that bitcoin is so famous for. It’s all well and good to compare exchanges and cryptocurrencies, but don’t sit there worrying about where the price of BTC stands. Short-term declines come and go, but if you believe in BTC as much as I do, then you can rest assured that your wealth is preserved. Keep in mind that there are only ever 21 million BTC available. As this is a finite offer and the world population is close to eight billion, with more people being added every day, the value of this asset is sure to increase over time as more governments and people take ownership of this new change in finance. If and when fiat eventually goes bankrupt and bitcoin takes over as the primary currency, an average BTC per capita in the world will be around 0.0025, and you definitely want to be in the top 5% of those who hold it.
- Keep it safe: Bitcoin is digital and hackers are always on the lookout for those who don’t watch their money. So, to keep my wealth safe, I keep all my bitcoin holdings in hardware wallets hidden in a safe place. There are plenty of good exchanges and hot wallets to choose from, but if you’re serious about preserving your wealth, keep it cool, keep it offline.
Why you shouldn’t wait to diversify
Allocating some of your wealth to bitcoin can be an effective way to preserve it and even grow it, but as the saying goes, “the best time to start is yesterday, the second best time is now.”
do not wait BTC will hit $50,000 before you suddenly wake up and start buying. Make a plan today and start diversifying your portfolio into this future-proof asset class, so you know your wealth is safe no matter how bad your government gets.
This is a guest post by Konstantin Riban. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.