Even if you don't need Bitcoin, you still need Bitcoin.
It’s hard explaining Bitcoin to Westerners. Especially Baby Boomers. This is not a criticism but an observation, and it makes sense.
Our currencies in the West tend to be strong relative to many smaller currencies around the world that are crumbling or have collapsed, such as in Lebanon and Argentina. We’ve also had about 50 years of effectively upward growth in our investment portfolios, so Baby Boomers have disproportionately benefited from loose monetary policy and a strong economy. (That is not to say that Baby Boom generation isn’t hard working, industrious, etc.; the point is simply that even a lazy generation can benefit from this sort of environment for a time).
Recency bias says the music will keep on playing. In this kind of economic climate, why would YOU, dear Westerner, need or care about Bitcoin?
I’ll skip on the benefits to the energy grid, reducing the incentives for war, protecting the poorest among us from harsh economic circumstances, and bringing electricity to remote areas of the world and focus instead on two areas that could impact you directly.
I’ll get the conspiracy theory, tinfoil hat use case out of the way first.
You buy insurance for your car, your home, you health, your life… everything important. But most people don’t have insurance against the devaluation of their currency.
Your dollar, pound, or Euro is preprogrammed to lose value. The need to service an ever increasing debt, fund unnecessary wars, and pay out recipients of welfare and social programs mean that more money will be printed by governments, either physically and digitally or through low interest rates, which allow money creation via increased bank lending.
Desirable goods - fuel, meat and eggs, automobiles, healthcare, education, as examples - are disproportionately affected by this currency devaluation because they require real work, time, and energy to produce. You can’t run more gas or cars off the assembly line without real effort, time, or raw material inputs.
Cheap garbage like Cheez-Its, on the other hand, are easy to make and are therefore less impacted by inflation. Besides, you can always play with ingredient quality or fill the bags with more air to keep costs down and prices “stable.”
So, even if your investment portfolio (if you’re lucky to have one) is “beating inflation” overall (which it may not be, CPI is heavily manipulated), it likely isn’t keeping pace to afford you the most valuable things that you’ll want and need over the long run.
Eventually, a new money will emerge victorious by virtue of it’s inability to be controlled or manipulated by governments. If you take time to study for 100+ hours, it becomes obvious that this money will be Bitcoin.
Owning Bitcoin, therefore, is insurance against the inevitable devaluation and/or collapse of your local currency.
I’m not predicting a time frame on when this happens in the West; it could be this year or five or 20 or 50 years out. But acquiring a bit of Bitcoin now while its cheap relative to its future potential, versus having to work hard to earn it down the road, seems like a reasonable idea to me. This is particularly true if you have a long time horizon and want to amass value that you can pass down for generations.
I’ll suppose for now that you entirely reject the above use case - many do.
Let’s talk more practically for the everyday person.
You might imagine that your currency won’t collapse or that you can keep up with inflation, but that isn’t reality for everyone in the world. Most of global South, much of Africa, and southern Asia, as examples, have or are already experiencing monetary collapse or hyperinflation.
This means that demand for Bitcoin will rise in these countries as a means of escape, driving its value up globally.
You can capitalize on this upside by owning some Bitcoin as part of your long-term portfolio. I emphasize “long-term” because until now, Bitcoin has been volatile in the short-term. But over any four-year period of Bitcoin’s existence, it has gone way up.
In fact, over any four-year period, a 2% Bitcoin and 98% cash portfolio (the latter losing value) beats a 100% allocation to the S&P 500, the second best performing asset (behind Bitcoin) since 2013. That’s an impressive feat and, soon, every anti-Bitcoin financial advisor will have a lot of explaining to do for continuing to resist what is so obviously before them.
I never provide financial advice, but the way I see it is that Bitcoin can serve as a means of gaining higher levels of purchasing power than any alternative investment option over a long enough time horizon.
Maybe “preparing for the collapse of your monetary system” doesn’t seem like a compelling reason to buy some Bitcoin.
But, I’d be willing to bet you’d like to see your net worth increase more significantly over the next decade.
The practical reality is that more and more people will continue to adopt Bitcoin in the coming years out of necessity. Others will adopt it proactively. Still others, opportunistically.
But the reason for adoption doesn’t matter. What matters is that those who took time to learn about and acquire Bitcoin will reap the benefits of its protection and appreciation qualities.
Michael is the Chief Revenue Officer of The Bitcoin Way and host of The Bitcoin Way Podcast.
To schedule a call with The Bitcoin Way to learn more about proper Bitcoin self-custody, you can do so here.
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