Why Bitcoin ($BTC) is probably your only way out

For everyday individuals like Joe and Jane, the rapid devaluation of currency could significantly affect their present and future financial stability and savings, unless they take action. Might an investment in Bitcoin provide a solution for them?

The fiat experiment is coming to an end

A significant portion of the global populace may remain unaware of the economic trajectories of various nations. As debt continues to accumulate, the solution often appears to be the endless printing of currency by the respective central banks, with the aim of meeting these mounting financial obligations.

It appears that the era of fiat currencies is drawing to a close, marked by an unprecedented level of failure. The concept, where countries blindly emulate the U.S. Federal Reserve and print unbacked paper money without much regulation, has pushed the global economy perilously close to financial ruin.

15% per year is the minimum needed to stay above water

To maintain their purchasing power constant annually, the average person might need to earn an additional 15%, accounting for both inflation and currency devaluation.

As a seasoned crypto investor, I must admit that finding investments promising a minimum yearly return of 15% isn’t an easy task for even the most experienced Wall Street investors or the average Joe and Jane like me. However, some digital assets have shown such potential in the past.

The sinking ship of government bonds

Over the past few years, bonds have been perceived as risky investments due to institutional investors and foreign countries requiring increasingly higher returns before considering them. Even if they are willing to invest, the majority are purchasing short-term bonds that mature within a year or two because the future beyond that is uncertain and hard to foresee.

Gold and silver outperform fiat but …

It’s highly probable that the value of gold and silver coins will surpass all paper currencies in the long run, however, banks have historically kept their prices low for many decades using the derivatives market. Despite this, both metals are gradually increasing in value, but neither has reached the 15% annual growth target as of now.

Picking a stock market winner

For the average investor there remains the stock market. If one is able to lay money on the right horse there is the possibility of far more than 15% per year. However, the big investors who consistently outperform the average stock market gains are few and far between. For those new to investing, picking a stock that is making these kinds of yearly gains is like picking a needle out of a haystack.

The one asset that consistently outperforms

In essence, we’re discussing the investment that could prove beneficial for many – Bitcoin. As of now, Bitcoin has already increased by more than 500% this year, and we’re nearing the final phase of its bull market, which might potentially lead to further gains.

It’s worth noting that since its inception in early January 2009, Bitcoin has outshone virtually all other global assets in many years. However, it’s essential to keep this in mind: Bitcoin tends to follow approximately 4-year cycles. During these cycles, Bitcoin typically experiences a 3-year period of growth during a bull market, followed by a 1-year period of decline during a bear market.

Despite bull markets yielding significant profits for investors, bear markets can be particularly harsh. For instance, the recent bear markets in 2018 and 2022 saw declines of approximately 73% and 64%, respectively.

To make it clear, investing in Bitcoin calls for a long-term perspective, ideally spanning over four to five years, and possibly even beyond.

Consider Bitcoin as a safe haven for your savings, where their value tends to grow rather than shrink, unlike traditional money (fiat currency) savings which typically depreciate over time.

The choice needs to be made now

Bitcoin could serve as a life raft for those seeking financial security, particularly in light of the challenges many investors face when trying to find high-return stocks that consistently surpass the 15% hurdle rate. Given the complexity involved in identifying these companies and determining the optimal time to sell, it might be beyond the expertise of most average investors.

Lastly, remember that Bitcoin is an extremely unpredictable investment. Its fluctuations far exceed those of most other assets. It’s not uncommon for its value to rise or fall by tens of thousands of dollars within a single day.

Additionally, it’s important to note that every asset carries the risk of failure. For instance, Bitcoin might eventually face failure due to numerous factors. On the other hand, keeping your money in a traditional bank or savings account doesn’t guarantee a positive outcome either. In fact, it may lead to unfavorable circumstances in the long run.

As a crypto investor, if you’ve just realized the potential risks looming ahead, know that there’s still time for you to act. The financial moves you make today could significantly impact your tomorrow.

2024-12-12 17:15