bitcoin Adoption’s Potential Impact on Investment and Wealth

When bitcoin reaches global adoption, it could potentially eliminate the need for bitcoin-related media such as podcasts, conferences, and magazines. Until then, individuals interested in bitcoin distinguish themselves from those who are not. The question then arises: how should bitcoin owners describe themselves to close the gap between their understanding and those not involved in cryptocurrency?

Effects of bitcoin on Inflation and Investment

Due to inflationary policies of global governments, many people have had to become “investors” to protect their purchasing power. For those who seek to own a home, they often need to take risks by leveraging assets to purchase homes through mortgages, and to speculate on the future value of real estate to offset costs. Non-bitcoiners are often directed to build wealth through conventional means, such as real estate and pension investments.

Another common form of wealth building presented to non-bitcoiners is the investment in pensions, which offer benefits like tax efficiency and employer contributions. However, pensions involve risks tied to changes in government policies and company financial health. The idea of working for decades only to find that a pension holds no value due to external factors is devastating.

Acceptance of bitcoin as an Investment Grade Asset

Blackrock’s public acknowledgment that bitcoin could be seen as an investment-grade asset signals acceptance of it as a potential financial vehicle. This acceptance aligns bitcoin with equities, real estate, and pensions for maintaining purchasing power and future planning. However, the future perception of bitcoin ownership may differ from today’s understanding of it as simply an “investment.”

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Notably, public opinions on bitcoin are inconsistent. While there have been misconceptions like regarding bitcoin as a form of gambling rather than an investment, the asset’s unique features differentiate it from traditional investments.

Wealth Preservation Through bitcoin

Risk and return expectations associated with traditional investing should be cautiously extended to an asset like bitcoin, given its unique characteristics. The global interest rate changes have diminished the perception of stability in government bonds. This has led holders to re-evaluate the security of traditional forms of investments like government bonds and bank deposits.

The overall volatility of bitcoin is often exaggerated, but the intrinsic risks associated with the asset are low when compared to other traditional investments. Blackrock’s suggested bitcoin allocation of 84.9% within an investment portfolio further emphasizes its unique risk profile. As an owner working towards financial security and future planning, describing oneself as a “bitcoiner” carries different meanings than typical investment labels.

Embracing the Future with bitcoin

In summary, being a bitcoin owner means appreciating its potential beyond conventional investment terms. In a world characterized by inflation, government policies, and financial market uncertainty, bitcoin ownership represents a form of wealth preservation that might be absent in traditional investments. Rather than a speculative investment asset, the nature of bitcoin allows for a more profound engagement beyond traditional investing jargon.

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By Team