Why it pays to invest in Bitcoin before an economic crash

Bitcoin may rise in price as the dollar depreciates, but the rise in price and inverse correlation may not be as flattering to the cryptocurrency as it seems. The rise in the price of Bitcoin over the past decade (since the token was introduced) may have been underlined by the inflation of the US dollar. shows a slightly skewed value in the market. This is because the price of Bitcoin is usually valued in fiat, often in US dollars.

Bitcoin price against the US dollar after the economic crisis

After the economic crisis, the US dollar recorded an annual inflation rate of around 2% – one of the lowest inflation rates in the world economy ever. However, this has approached inflation close to 20%. Given that number, Bitcoin would be closer to $ 8,470 when looking at the current Bitcoin price of $ 10,587.70 taking into account devaluation and inflation. However, this only relates to the US dollar price of Bitcoin and not to the perceived international value that the cryptocurrency possesses.

Bitcoin as a safe hedge against inflation

This takes into account; It shows that storing funds in the cryptocurrency industry can ensure that the funds remain protected from inflation. If an investor had invested $ 1.00 in US dollar assets ten years ago, they would have paid 84 cents. Bitcoin on the other side of the coin has seen a return on investment (ROI) of 7,723.75% since launch. This not only shows that the cryptocurrency can hold its own against inflation, but it has also seen massive growth in value over the past ten years despite economic instability.

Bitcoin outperforms the major indices by 70 times

As Buyshares reported earlier this year, Bitcoin’s ROI is more than 70 times that of major indices, including the Financial Times Stock Exchange 100, NASDAQ, Nikkei, S&P 500 and Dow Jones markets.

According to data analyst Justinas Baltrusaitis, the price of Bitcoin over the past five years shows the token’s generous investment returns:

During the reporting period, the ROI of Bitcoin was 3,456.98%, with Bitcoin price being $ 257.06 in June 2015 and rising to $ 9,143.58 by June 26 this year. On the other hand, the average ROI for the highlighted indices was 49.27%. “

Why is Bitcoin so worthwhile as an investment option?

Bitcoin is a worthwhile asset to consider when adding to a portfolio as it can maintain overall stability despite its inherent volatility and constant growth over the years. The cryptocurrency industry and other altcoin prices may have suffered a blow as a result of the crash following the great 2017 bull run. However, the market continues to boom and promises to keep attracting new investors. Baltrusaitis believes that Bitcoin has become a key asset for diversifying investment portfolios due to its positive profits and high ROI, as well as its regulatory efforts.

“Bitcoin became increasingly popular five years ago in particular, but it met with great opposition due to the regulatory problem. Bitcoin crusaders are pushing for it to be mainstream. The increasing value of the asset may come with improved regulations in different jurisdictions. Most people got on the Bitcoin cart after hitting an all-time high of $ 20,000 in December 2017, which crashed to around $ 3,500 a few months later. “

Bitcoin growth during the coronavirus pandemic

Bitcoin is not only protected from inflation, but is also considered a store of value that is protected from a possible economic crash. Given the fears and uncertainties following the blockades of the global pandemic, Bitcoin could gain further attention and acceptance. As Baltrusaitis noted:

“With the coronavirus pandemic that led to the traditional market crash, many see Bitcoin as an alternative store of wealth. Bitcoin fans see the pandemic as a catalyst for the cryptocurrency to become digital gold. “

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