Are You In?
To be honest, anyone that is still not in some way involved in Crypto at this point is missing the opportunity of a lifetime. It has become so blatantly obvious how Crypto is able to solve so many current issues in our world. Every fiat currency is losing value at an accelerated rate, beyond what was forecast. Bearing in mind that the forecasts were already factoring in an increase in inflation. The Turkish lira, for instance, lost 50% against the dollar in an extremely short period of time recently. Bitcoin was hitting new all-time highs in Turkey, as Turkish citizens rushed to try and preserve their capital through acquiring Bitcoin.
Planning To Avoid Calamity
There is a lesson to learn from the Turks. The Lira has been under strain for some time, this is nothing new. Had they instead prepared for what was clearly on the way, they could have hedged themselves to some extent. However, the majority only woke up when it was already too late. There were obviously those who did begin moving cash reserves into Bitcoin, ultimately finding shelter before the 50% crash against the dollar. They also then went on to experience further gain as the majority made a late rush on Bitcoin and subsequently pushed it to new all-time highs.
Collapsing against Weakness
Waiting for your expectations to first come to pass before acting on them is definitely not the wisest move. What many fail to realize is that even though the dollar is losing value at an accelerated pace, other fiat currencies are still collapsing into the dollar. If the dollar is losing ground and your particular national currency is weakening against the dollar, how weak is your currency? The saying that is often referenced by Bitcoiners is “all fiat goes to zero”. This is actually the structural destination of any fiat currency and yet sounds like a particular group, in this case, Bitcoiners, getting ahead of themselves.
The Truth Is Staring You In The Face
So, where are we now in regards to the dollar? Since its inception, the dollar has lost 98% of its purchasing power, never once showing volatility towards the upside. Simply one long massive dump extended over decades. Comparing the graph of an abandoned altcoin with no use case would reveal quite a few similarities. There is no future wrapped up in any fiat currency. The reason it goes largely unnoticed is due to the fact that is generally spent within days of earning it by global consumers already short of it. Furthermore, it is a “slow leak”, similar to what you may have experienced on your vehicle.
You can drive around all day and everything is just fine. However, in a few days’ time, you are met by a completely flat tire in the morning. Similarly, you can save for years and years only to find that what you have saved is now unable to purchase anything of significant value. This is the “fiat effect”, even in countries where the currency is considered to be fairly strong.
Inflationary Hedged Asset
This is why even the most conservative investor should have even a small exposure to Bitcoin. The likelihood of that small allocation growing significantly over the next five to ten years is very likely. BTC is in essence a long-term investment, which basically means that short-term volatility is merely noise. In my opinion, if after 5 years Bitcoin didn’t produce gains, by all means, scrap it from your portfolio. However, this has never happened before and in my opinion, is not likely to ever happen.
Too Little Too Late
Even though the Turkish population did in essence execute what many would consider being the best option, it was too late. Doing the right thing at the wrong time is almost the same as doing the wrong thing! For the simple reason that it is no longer beneficial. The wise learn from the mistakes of others, subsequently protecting themselves from the outcomes of terrible decisions. This is done by simultaneously extracting the wisdom, which another paid the price to reveal.
Let’s all take note of what happened in Turkey and many other parts of the world. Whatever we can learn is most definitely to our advantage, provided we act on it. Thanks for stopping by and see you in the next one!