According to a Bitcoinist report on April 13, more and more analysts are encouraging young people to use the current downturn in the cryptocurrency market to invest in bitcoin for life after retirement. Although this idea is not new, the inflation problem in the traditional financial field makes investing in Bitcoin more attractive. One analyst asserted that from the perspective of long-term returns, investing in one bitcoin is better than making traditional savings.
Inflation may change the rules of the game
Over the past 40 years, retirement plans in developed countries have gradually shifted from fixed benefit plans (such as standard pension plans) to fixed payment plans. Although the wisdom of this transition is still controversial, there is no doubt that the retirement income of millions of people today is largely dependent on some form of personal savings.
For those with sufficient savings, this approach is not bad. However, decades of low inflation and a brief economic recession may have a big impact on it. If the current global financial crisis causes inflation to soar, retirees may fall into economic difficulties.
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For those who are still working, the long-term depreciation of fiat currencies such as the US dollar and the euro can be devastating. As the earning power of retirement savings fades, people may choose a more radical way of saving. Analyst Davincij15 stated in a recent tweet:
From small to large, I have witnessed the depreciation of the fiat currency. I do n’t know how much the current $ 150,000 can buy when I ’m 65. I do n’t know how much money will be able to afford my retirement.
Deposit 1 bitcoin and you will have more by the time you are 65.
Davincij15 admitted that it was wise to start saving when he was young, but he pointed out that inflation would make all saving behaviors in vain. This is why he would advocate Bitcoin as a possible hedging tool.
Bitcoin enters retirement portfolio
In the current economic crisis, many people say that Bitcoin is a potential safe haven. However, we should pay more attention to ideas that consider long-term investment in Bitcoin. As we all know, young people prefer to invest in cryptocurrencies, and employees under 35 choose to add blockchain assets to their retirement portfolio more than ever.
Of course, part of the reason for this trend is that people believe that the performance of cryptocurrencies will continue to be far better than traditional investments. Young investors may now make such a choice to protect them from inflation or other economic recessions after retirement. In other words, cryptocurrencies may be added to hard assets such as gold and government bonds and become part of a reasonable investment portfolio.
There is no doubt that Bitcoin and other cryptocurrencies are permanent elements in the global financial landscape. And the current economic crisis has given more legitimacy to this new asset class than ever before.