Preserving Wealth with Bitcoin

This is an opinion editorial by Konstantin Rabin, a finance and technology writer.

Bitcoin, the oldest cryptocurrency, is increasingly being used as a reliable store of value for those looking to move away from more established asset classes. It has proven to be a solid hedge against inflation. In fact, I have been allocating a share of my wealth to bitcoin for some time now. In this article, I will explain why I do this and how I see it as ideal for preserving the value of my net worth.

Why Allocate A Share Of Your Wealth To Bitcoin?

Despite the volatility and fear-mongering that is often associated with bitcoin, there are plenty of reasons why it is a valid investment. No reputable investor would advise putting all of your life savings into crypto, but there is potential for long-term returns or for preserving a portion of your wealth this way.

Here are just a few advantages to investing in bitcoin:

  • Alternative store of value: Bitcoin is a good option when looking for a store of value outside of third-party manipulation. It is decentralized and circumvents the red tape and fees that come with leaving your money in the hands of financial institutions. As a result, it is not subject to the same inflationary pressures as companies operating in the government-controlled fiat currency system.
  • Potential for long-term growth: Although bitcoin’s value is extremely volatile in the short term, its long-term trend has historically been bullish. The idea of HODLing comes into play here, as you can only see the true value of your investment when holding on for dear life and ignoring the spikes.
  • Diversification: Investing in bitcoin does not mean putting all of your eggs into the crypto basket, but it can provide future-oriented diversification for your investment portfolio. Bitcoin’s price is increasingly uncorrelated to traditional assets like stocks and bonds, so adding some digital coins to your portfolio can help spread out overall risk. Bitcoin has also become a new sort of semi-safe-haven asset class which many investors flock to during times of financial instability.
  • Accessibility: Investing in bitcoin is becoming easier, with many platforms and exchanges offering a simple and secure way to buy and hold your BTC. It has also never been easier to liquidate this asset and get fiat cash in hand when the need arises, which is a significant advantage over the stock, bond or real estate markets that are often plagued by liquidity issues.

Spending a share of your income on BTC is unlikely to make you poor in the long run. On the flip side, not allocating anything to BTC might ruin your prosperity, especially during uncertain times when banks can go bust without warning, inflation seems to be ever on the rise, and some countries witness their fiat currencies turn into toilet paper.

Why I Don’t Buy Or Mine BTC

There are obvious channels for acquiring bitcoin, such as hitting up a cryptocurrency exchange or peer-to-peer marketplace and exchanging fiat for BTC. However, this approach is not the best way to get your coins for wealth preservation in my opinion. You could instead go the route of a miner and spend a large fortune on buying all the equipment needed to try and get some BTC that way, but the average mining cost per coin is over $30,000 in many countries, making it more likely that you will end up with nothing. So, my suggestion is to earn it.

Many people have a side hustle that can easily be employed in generating digital currency, and offering clients the ability to pay in crypto for services is becoming increasingly popular. While most clients prefer stablecoins like USDT, it is easy to flip these over to BTC and keep padding your bitcoin wallet.

One more notable online activity that I partake in to stack some BTC is for the over-18-year-olds only. No, I don’t mean OnlyFans. I do some work in and around the gambling industry and also enjoy a bit of a gamble myself from time to time, but I solely gamble for BTC.

Bitcoin betting sites have been gaining traction lately, thanks to their ability to protect privacy, offer deals (e.g., bonuses, commissions, etc.) and general improvements over the annoying bureaucracy inherent in fiat betting sites. Obviously, I don’t recommend gambling to anyone, but this is something I enjoy occasionally, such as when my favorite UFC fighter jumps into the octagon, as it adds a bit of excitement while watching the fights, and obviously, the winnings are added to my wealth-preservation BTC fund.

My BTC Wealth Preservation Strategy

You might be wondering why I am hammering on bitcoin and not paying much heed to the rest of the crypto pack. Frankly, as most of the top tokens are following the bitcoin price like a donkey chasing a carrot, I don’t typically diversify things or allocate a share of my crypto investments into other major coins and tokens. Don’t get me wrong, I believe that some of the cryptocurrencies out there are useful, but, as bitcoin is what determines the value of many of the top dogs on the list, sticking with BTC as my investment coin just makes sense. (For those keen on diversifying into other crypto projects, I do have one bit of advice; stay away from meme and shitcoins.)

Now, let’s get down to business. Here is my advice for preserving wealth via bitcoin based on my own strategy:

  • Plan: Whether you are investing with fiat currencies that you get from working a day job or getting paid directly in crypto via your own projects, make sure to have a well-defined goal. Set certain annual or even quarterly amounts that you would like to reach and try your best to make it happen.
  • Don’t panic: Always work on increasing your BTC holdings and be ready to HODL until kingdom comes. Don’t pay much attention to the fiat value and don’t panic sell just because you see some of those crazy price swings that bitcoin is so famous for. It is all good and well to compare exchanges and cryptocurrencies, but do not sit there stressing about where the price of BTC is sitting. Short-term dips are bound to come and go, but if you believe in BTC as much as I do, then you can rest assured that your wealth is being preserved. Keep in mind that there are only 21M BTC available, ever. As this is a finite supply and the world’s population is close to eight billion, with more people being added every day, the value of this asset is sure to increase over time as more governments and people take hold of this new shift in finance. If and when fiat finally goes completely bust and bitcoin takes over as the major currency, an average BTC per capita in the world is going to be around 0.0025, and you most certainly want to be in the top 5% of those holding it.
  • Keep it secure: Bitcoin is digital, and hackers are always on the lookout for those who are not keeping a watchful eye on their money. So, to preserve my wealth safely, I keep all of my bitcoin holdings in hardware wallets stashed in a safe place. There are plenty of good exchanges and hot wallets to choose from, but if you are serious about preserving your wealth, keep it cold, keep it offline.

Why You Shouldn’t Wait To Diversify

Allocating a portion of your wealth to bitcoin can be an effective way to preserve it, and even grow it, but as the saying goes, “the best time to start is yesterday, the second best time is now.”

Don’t wait for BTC to hit $50,000 before you suddenly wake up and start buying in. Set up a plan today and start diversifying your portfolio in this future-proof asset class, so you know your wealth is safe, no matter how bad your government might be.

This is a guest post by Konstantin Riban. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.