Many would-be investors, outside the cryptocurrency space, are probably looking in and wondering what it’s all about. Governments have been very anti-crypto until recently, but now they seem to be warming to it. Should you be investing in crypto?
A new asset class to be laughed at
You may have been investing in the stock market, and perhaps you hold bonds and other traditional assets. You may have had a quiet laugh at the rather silly crypto asset class that just appeared on the scene several years ago.
All the important leaders of financial institutions queued up to say their piece on crypto, and it really wasn’t positive. In fact, all of them thoroughly denounced the likes of Bitcoin as a fraud and a go-to only for money launderers and those looking to take part in all sorts of other criminal skullduggery.
Outperforming everything - in spite of headwinds
Nevertheless, in spite of all these dire warnings, total bans by the likes of China, massively unfriendly stances by government watchdog agencies, and swingeing and penalising regulatory rules, Bitcoin, and some of the other more innovative cryptocurrencies, appear to have thrived.
As a matter of fact, they haven’t just thrived, but they have outperformed stock markets, precious metals, and basically, any other asset class out there.
Is this a good time to invest?
Ok, so you might be thinking that if an asset class has gone up this much, surely it must be ready for the hugest possible price correction? And to some degree, you will eventually be right - a large correction will certainly fall upon the crypto sector.
However, the crypto bull and bear cycle has historically lasted around 4 years, and we are currently around 20 months into the bull market. If previous bull markets are anything to go by, we would probably descend into a bear market in the latter part of 2025.
But what about traditional investments?
So there is still time to invest in crypto. But what about those investors who are extremely risk averse, and only invest in the typical 60/40 portfolio made up of bonds and stocks, that is generally favoured by financial advisors who are embedded in the traditional financial system?
The general consensus is that this kind of portfolio just doesn’t cut it any more, unless of course, you listen to huge asset manager Vanguard.
In fact, if you listen to macro economic analyst Raoul Pal, you would hear that there aren’t any asset classes that are keeping up with central bank currency debasement, in tandem with high inflation - with the exception of technology (AI) and crypto.
Neil Howe, in his book “The fourth Turning” tells us that civilization has arrived at a hugely critical point in history, and that the world’s financial system is about to change. Could Bitcoin and crypto supply that change?
The figures don’t lie
If you put any asset against Bitcoin over its short 15-year history, you would find that all of them have fallen exponentially against what has been termed ‘digital gold’. In fact gold itself is down more than 10,000% against Bitcoin, and that’s only since 2014.
These figures do not lie. There is only so much bankers and leaders of governments can do or say to try and prevent the average Joe or Jane from investing in crypto. There are only so many mainstream press articles, probably sponsored by the aforementioned, that can be written with the aim of putting people off from buying Bitcoin.
When all is said and done, crypto, and especially Bitcoin, are ways of maintaining financial freedom from the awful curse of government-backed fiat currencies. These currencies are being printed into eventual oblivion, just in order to service the debts, and to keep wars going.
Currency in the bank
If you have your particular fiat currency sitting in the bank, perhaps earning you around 5%, you need to accept that if debasement plus inflation equates to around 14%, you are 9% underwater every year. How long will anyone be able to endure this?
Do your own research - and soon
Growing your wealth, financial freedom, ability to transact with anyone, anywhere in the world, without any bank or government saying nay, are all fine reasons to hold crypto. Do not just believe someone on the internet. You need to do your own research on what this article is stating, and you need to do this soon. Your wealth and freedom depend on it.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
