The cryptocurrency market is booming again and this is reflected in the price changes of many cryptocurrencies. However, Bitcoin (BTC) is still one of the most popular coins on the market. Major cryptocurrencies have recently achieved new price records, garnering attention both within and outside the cryptocurrency community. With the emergence of Bitcoin spot exchange-traded funds (ETFs) in the United States, the currency is gaining acceptance in the traditional financial sector. This is an indication that BTC and other cryptocurrencies belong in your retirement savings plan.
In this blog, learn what Bitcoin and other cryptocurrencies could mean for your retirement and how you can prepare for it.
Bitcoin’s Long-Term Success
The power of Bitcoin lies in the scarcity of the currency. There can only be a maximum of 21 million BTC coins in total, and mining them becomes increasingly more difficult over time. This is in stark contrast to fiat currencies such as dollars or euros, which can be printed infinitely. We see this happening in the world. Dollars, euros and other currencies are being printed in large quantities to support the economy or pay off the country’s debt. As a result, holding currency can have a negative impact on purchasing power, especially in the long run.
Figure 1: Purchasing power of the dollar over time (Source: Visualcapatalist)
Figure 1 clearly shows how the purchasing power of the largest currency, the dollar, has declined by 97% over the past 100 years. Therefore, it is important to prepare well for retirement and save in scarce goods that preserve purchasing power.
Bitcoin in Pensions
Bitcoin offers investors an alternative. This is a way to invest in digital gold that, unlike physical gold, can be easily transferred and stored. With the advent of Bitcoin ETFs, investing in the popular cryptocurrency is becoming easier. There is no need to store your coins yourself, you can simply invest in BTC using any existing exchange. Ideal if you are looking for a long-term or pension investment.
Invest in Innovation
Moreover, the cryptocurrency market offers another alternative. Many projects seek to solve complex everyday problems that can foster innovation and change the future. Think Solana (SOL), which enables ultra-fast and cheap transactions, or Cardano (ADA), which enables financial equality in Africa. Of course, there are some crazy projects in the cryptocurrency market like Shiba Inu (SHIB) that are gaining a lot of attention and using humor to attract users.
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Nonetheless, the cryptocurrency market is still an interesting market that offers opportunities and risks. One thing is certain: the purchasing power of currencies will decline in the long term, and perhaps coins like BTC are worth considering as long-term investments. Want to stay up to date on the latest Web3 and cryptocurrency news? Then check out blockspace.nl, a premium Dutch Web3 and cryptocurrency website.