WEALTH AND FREEDOM
The road to financial freedom and buoyancy has never been as simplified and straightforward as cryptocurrency has made it, you are your central bank and you are your own government financially. With calls for the introduction and adoption of Decentralized finance sweeping over the global finance system, it’s hard to not see all the changes and impacts cryptocurrency has on the common man and Although digital assets are still facing stern opposition from many government and central banks, there’s no pulling the plug on cryptocurrency and decentralization.
With this in mind, retail and institutional investors alike are often seen running towards digital assets and gold to hedge their finances against inflation. Most recent reports put the global inflation rate at an all time high While the US inflation rate sits at 8.54% according to the most recent inflation reading, We’ve also seen worse from across Europe with the global Covid pandemic and ongoing invasion of Ukraine by Russia not helping matters.
Now there’s a stemming debate among investors regarding which is a better hedge against inflation Gold or BITCOIN?
Early Investors in digital assets would argue in favor of Bitcoin not only due to its capabilities as a hedge, but also based on the gains it has earned them over the period of their investments. And although gold, having been valuable since anyone can remember, is a slow mover in terms of profits earning and this has always been seen as a disadvantage by bitcoiners. While other Investors tend to call out digital assets pointing to its volatility as a big disadvantage. Imagine throwing a party because your portfolio of digital assets is 20% up, and before the party is over, you’re 50% down. Sounds ridiculous right, but that’s what most Investors get to put up with. So which one of them would I consider and hold on to?
Honest answer? Both! In a ratio of 6:4 in favor of bitcoin and digital assets this is because I personally believe the upside is massive for digital assets compared to gold which although has been a tested and trusted hedge for centuries, is also a slow mover. Why settle for a 2% interest after years when you can easily be 100% up with cryptocurrency?
Notice how fiat currency isn’t even part of the discussion? Yeah, that’s how useless fiat can be most of the time. However, there are cons to every good innovation, for cryptocurrency, it has been the risks of volatility or cyber attacks, and energy consumption by digital currencies running on POW(proof of work). Gold on the other hand may not have these issues, but it isn’t anywhere close to digital assets in terms of usability and financial technology implementation. So at the end of the day, gold is just gold but cryptocurrency is innovation, financial freedom and above all the future of global decentralization and finance.
Stick around for my next piece. It’s going to be epic.