25 January 2021
Anytime there's an economic recession or a pandemic, many are left wondering how to get back on their feet. Finances are a sensitive matter whose management requires strategy and proper planning. Financial peace of mind is an elusive state achievable by being smart and disciplined about every single penny.
The world's wealthiest people will admit that the key to having peace of mind when it comes to finances is letting your money work for you. The easiest way to achieve this is by investing.
For a long time, passive investment choices have been stocks, bonds, pension schemes, among other investment vehicles. However, the decisions made by the Federal Reserve in early January to keep interest rates low and increase the supply of money to fund a COVID stimulus package will significantly reduce the returns that investors can expect from
This is why large financial institutions and billionaire investors are turning towards Bitcoin to boost their returns while capitalizing on the growing consumer interest in cryptocurrencies.
With the scale of investments that these institutions and investors are putting into Bitcoin each day, the window of opportunity is closing for the everyday investor to transform their financial situation for themselves and their families.
In this analysis, we will show you the secret to why Bitcoin can be a generational investment and how you can get started today.
Financial peace of mind can be defined as having the security of knowing that there's some money somewhere for emergencies and sorting out their daily needs. Even better is knowing that the future of their children is secure and well catered for.
There's no harm in dreaming big and wanting a good life. The recent pandemic has been an eye-opener for most people and has taught almost everyone that having a diversified income basket isn't an option.
A recent study by T.Rowe Price on generation X (people born between 1965 and 1980) found that those in this age bracket were at a critical point of retirement planning. Out of the participants surveyed, 77% believed that achieving financial peace of mind was one of the primary objectives in their lives. Most agree that they were doing little towards their 401(k)
We are living in a digital era where one can easily make money in their sleep. There are so many opportunities for your money to make money for you, and Bitcoin happens to be a solid choice.
Before we delve into that, let's go down memory lane and learn a little history about the world's leading cryptocurrency.
There is no shortage of types of assets that you can invest in: stocks, bonds, commodities, real estate, and more. However, the uncertain market conditions that COVID has created globally has led “smart money” (i.e. large financial institutions and well-known investors) to carve a sizable percentage of their overall investment portfolio for Bitcoin. Here's a couple of reasons why Bitcoin should be top on your investment portfolio list:
Hedge Against Inflation
Most of your assets may be denominated using fiat money (US Dollar, to be specific). Currently, the federal government is flooding the market with currency through fiscal policies and stimulus packages. Most economies around the world rely on USD, but the currency is slowly losing its purchasing power.
Recently, the Federal Reserve announced their fiscal strategy for the US economy that would put us on a path towards a 2% inflation target. The impact will be that your savings will be worth 18% less in 10 years than today. Check out this useful inflation calculator to see how it can impact your savings.
Investors are drawn to Bitcoin given its scarcity, often drawing parallels to gold and other precious precious metals. Ultimately, it provides a hedge against any inflationary impact that can occur over the next 12-18 months from the upcoming stimulus support and continuing economic impact from COVID in the US.
Bitcoin has a finite supply of 21 million coins to be mined. Therefore, no individual or entity can ‘print’ more and flood the market. The low supply of Bitcoin will create increased demand over time, which will drive the price to unbelievable figures.
So far, about 18.5 million Bitcoins have been mined, and only 60% of these have moved inthe last 12 months. With interest from
institutional investors growing by the day, its price will continue to rise due to a capped supply.
The Entry of Institutional Investors
Big firms are now taking Bitcoin seriously, especially after the traumatizing impact of COVID-19 on the global economy. For a long time, cryptocurrency has remained an interest of retail
investors, but the big boys are now coming out to play in matters of Bitcoin.
As inflation continues to skyrocket and yields from other assets are on a sharp decline, these investors are quickly running of options to store value. They are buying Bitcoin in the droves
with hundreds of millions of dollars pumped into the asset. For example, Square, a publicly-traded company on the New York Stock Exchange, purchased $1 billion worth of Bitcoin late
It's still far from mainstream adoption, which is the magic pill need to bring out its real potential.
In the short term, Bitcoin is still highly volatile but may stabilize in the long run. Compared to other payment systems, transacting Bitcoin is still very expensive, which has limited its scalability.
Time is a crucial factor in achieving peace of mind when it comes to finances. That said, each money move you make should take you closer to achieving financial freedom. Looking at Bitcoin with long term eyes will help solidify your financial future.
The first steps towards profitability is to learn about Bitcoin and how to get started in investing. We have created a step-by-step video guide for beginners, aptly named “Getting Started in Bitcoin,” that will help you understand the fundamentals, provide a walkthrough for setting up an account for trading, and even how to secure your investments.