🌟 Bitcoin: The Anti-Fragile Asset 🌟
A valuable addition to one's portfolio, says Jennifer Murphy, CEO of Runa Digital Assets, is an asset that benefits from chaos.Benefits of Bitcoin Amid Global Stresses
Deficits ☠️ Inflation ☠️ War ☠️ Bank Failures ☠️ Cyber Attacks ☠️ De-dollarization. These risks loom large and threaten stock and bond returns for investors. It seems like there’s danger at every turn! Historically, U.S. Treasuries have been a “safe haven,” but from 2021 – 2023, Treasuries delivered -10%, their worst 3-year performance since at least the 1980s. Similarly, the 60/40 diversified portfolio suffered its worst performance period in 14 years, with a return of -16% in 2022. Ouch!
In an increasingly uncertain world, what’s an investor to do? Don’t panic, my fellow financial adventurers, because I have just the asset for you: Bitcoin! 🚀🚀
The Anti-Fragile Asset
In his book “Anti-Fragile,” Nassim Taleb explores the unique characteristics of things that gain from disorder. Imagine something that thrives on stress, that gets better when things get wild and unpredictable. That’s Bitcoin! 💪
When the Chinese government banned bitcoin mining in 2021, roughly 50% of bitcoin mining capacity was forced to shut down or move. But guess what? Within seven months, capacity had completely recovered, and now it’s over 2x what it was before the Chinese crackdown. Talk about resilience! 💥
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Even when the world’s second-largest crypto exchange went bankrupt, and the largest exchange faced sanctions from the U.S. Department of Justice, the Bitcoin network emerged unscathed. Transactions were unaffected, and trading volumes reached all-time highs. Bitcoin stands tall amidst chaos, my friends! 🌪️💥
Bitcoin: The Safe Haven?
Now, let’s talk about Bitcoin’s “safe haven” status. When Silicon Valley Bank collapsed on March 10, 2023, the stock market took a hit of over -1% the next trading day. But you know who had the opposite reaction? Bitcoin! It rose by a whopping 20%. That’s right, while others were panicking, Bitcoin was saying, “Hold my virtual beer.” 🍻
This safe haven response is a new phenomenon for Bitcoin, and time will tell if it persists. But hey, Bitcoin has been outperforming all other asset classes over the last 1, 3, 5, and 10 years. That’s a track record I can get behind! 🏆
Adding Bitcoin to Your Portfolio
Now that you’re convinced of Bitcoin’s anti-fragile awesomeness, let’s talk about how to add it to your portfolio. Research from Galaxy shows that a 1% allocation to bitcoin in a diversified portfolio over five years resulted in higher returns and better risk-adjusted returns, with virtually no impact on volatility or max drawdown. Now that’s what I call a win-win! 📈
Last week, Fidelity, the financial giant, added bitcoin to its diversified ETF portfolios in Canada. The Conservative ETF received a 1% allocation, and the Growth ETF got a 3% allocation. With Bitcoin ETFs now available in the US, like the Franklin Templeton EZBC or iShares IBIT, it’s easy for US investors to jump on the bandwagon 🚂
So, my fellow adventurers, little by little, your portfolio may gain a lot with Bitcoin as part of it. Don’t miss out on this opportunity to ride the waves of chaos and come out on top! 🌊🏄♂️
Remember, deficits, inflation, war, bank failures, cyber attacks, and de-dollarization are real threats to traditional investments. But fear not, my friends, as the anti-fragile Bitcoin may just be the answer you’ve been waiting for! 💎💪🚀
🤔 Q&A: What Else Do You Want to Know? 🤔
Q: Is it too late to invest in Bitcoin? A: While nobody can predict the future, Bitcoin has shown impressive long-term performance. Past performance may not guarantee future results, but many experts believe that Bitcoin still has room to grow. Just remember to do your own research and invest responsibly.
Q: Is Bitcoin safe from government crackdowns? A: Bitcoin has faced regulatory challenges in the past, but it has proven to be resilient. Governments may impose restrictions, but Bitcoin’s decentralized nature makes it difficult to shut down completely. It’s worth keeping an eye on regulatory developments, but don’t count Bitcoin out just yet.
Q: What about the environmental impact of Bitcoin mining? A: Bitcoin mining does consume energy, but the industry is actively working on adopting more sustainable practices. In fact, many Bitcoin mining operations are now powered by renewable energy sources. As the technology continues to evolve, expect to see more eco-friendly solutions in the Bitcoin mining space.
Q: Can I buy a fraction of a Bitcoin? A: Absolutely! You don’t need to buy a whole Bitcoin; you can buy fractions of it. Bitcoin is divisible up to eight decimal places, so you can start with any amount that fits your budget.
Q: How do I secure my Bitcoin? A: Bitcoin security is crucial. You’ll want to store your Bitcoin in a secure wallet, preferably using a hardware wallet for added protection. Remember to keep your private keys safe and never share them with anyone. Be vigilant and beware of phishing attempts and scams.
👀 Looking to the Future
As we look ahead, Bitcoin’s future seems brighter than ever. Its ability to thrive under stress and uncertainty positions it as a potential safe haven asset and a hedge against traditional investment risks. However, it’s important to approach any investment with caution and keep an eye on market trends and regulations.
So, my fellow adventurers, are you ready to embark on this Bitcoin journey? Share your thoughts and join the conversation! Don’t forget to like, comment, and share this article with your fellow crypto enthusiasts. Together, we’ll conquer the financial world! 🌍💪🚀
References:
[Edited by Benjamin Schiller]
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