This article is not investment advice but the personal opinion of the author. The capital value of any discussed investment can fluctuate, and the price can go down as well as up and is not guaranteed.
Step 1: Use Bitcoin as Your Personal Treasury Reserve Asset?
As a response to the stock market crisis 2008 and the COVID-19 crisis 2020-2021, central banks all over the world print massive amounts of money — “fiat currency” — and flood the market with money. The total assets on the balance sheet of the Federal Reserve grew from $0.87T in 2007 to $8T in 2021. This is a factor 10x increase in monetary supply!
For every 2007-dollar, there are now ten 2021-dollars.
Due to the debasement of the Dollar, Euro, and other so-called fiat currencies, more and more companies use Bitcoin as their treasury reserve asset.
- The definition of debasement is “the action or process of reducing the quality or value of something.”
- The definition of treasury reserve asset is “the asset used to store excess monetary energy across time.”
Should you apply the same strategy of holding Bitcoin instead of cash?
Michael Saylor, CEO of the SaaS company MicroStrategy, was one of the first business owners who moved his money out of Fiat currencies and into Bitcoin. His goal was to protect his company’s reserves against a 5-10% reduction of value every year and benefit from the increase of adoption and deflation of Bitcoin.
He bought $500 million worth of Bitcoin (his investment idea: HODL – hold on for dear life) and tripled his Bitcoin treasury reserve in less than a year.
You can watch this excellent interview where he explains his strategy:
Are you ready to move 10%, 20%, or even 50% of your own assets into Bitcoin? Read on!
Step 2: Create an Account
There are many ways to buy crypto-assets such as Bitcoin. As a German-based business owner, I wanted to find the exchange that offers maximum protection with minimal fees. After extensive research, I found the cheapest and most secure way to buy Bitcoin and other crypto-assets: Binance.
Binance is the largest cryptocurrency exchange in the world. As the largest exchange, it can spread the fixed costs over a large number of users—and offer their service cheaper than any other cryptocurrency exchange. For example, Coinbase is much more expensive than Binance. And on Binance, nobody has ever lost any of their assets—in many years of operation. It is probably the most secure exchange to buy and hold crypto assets in the world. 100 million people are now crypto users!
To create a Binance account, feel free to follow this link:
Here’s a screenshot of a sample account with 0.00226207 BTC in it:
If you register on Binance via the Binance links provided in this article, we’ll get a small kickback and you’ll support the Finxter mission. In the name of all Finxters learning with us, and in the name of all Finxter creators, many thanks! 🙂
The trading fees on Binance are really minimal—that’s why I’ve chosen them after all:
Trading fees are only 0.1% of your asset purchases. If you own more assets, the fees reduce even more. And holding Bitcoin and other assets is completely free! Compare this to buying stocks where the spread alone is often many percentage points. And if you bought an investment fund, you’d have to pay yearly management fees as well.
I definitely love how cheap crypto-assets like Bitcoin are if you just HODL them! ?
Step 3: Transfer Your Excess Cash to the Cyberbank
After you’ve created a Binance account, you can use it as a treasury asset. Measure your wealth in Bitcoin rather than Dollars!
The more money gets printed, the scarcer Bitcoin will become relative to the inflating asset (Dollar, Euro, Lira, RMB). More and more companies and individuals use Bitcoin as their treasury reserve asset, so demand grows by almost 100% per year during the last few years!
Bitcoin is a deflationary asset, i.e., the total supply is capped by 21 million. As Bitcoins get lost over time, the supply is even shrinking. If an inflationary asset meets a deflationary asset, the deflationary asset will grow in terms of the inflationary asset. This is textbook economics. And Bitcoin is the most scarce digital asset. It is digital gold.
As shown in the popular Stock-to-Flow article, the relative scarcity of Bitcoin is rapidly approaching that of gold—and many Bitcoiners believe that it is only a matter of time until Bitcoin replaces gold much like digital companies such as Facebook, Google, and Amazon replaced physical companies.
The world goes digital and money is no exception.
As the production of Bitcoin reduces regularly (in so-called halvings), Bitcoin becomes more and more scarce. Time is the friend of the Bitcoin holder, not the enemy!
The unique idea of Bitcoin was to prevent excess production of new Bitcoins (e.g., through copy&pasting) by using a scientifically sound concept based on proof-of-work. Soon, the relative production of gold will be higher than the relative production of Bitcoin and many participants expect the Bitcoin price to rise to a level of $200,000 and above. See the following video for an even rosier price prediction.
This means that there’s a strong incentive for people and companies to start acquiring Bitcoin before everybody else which further fuels the growth of adoption. If you’re ready to exchange some of your assets into Bitcoin, check out the cheapest and most secure cryptoexchange in the world. Then move a regular sum of your excess cash over to your BTC account and start tracking your net worth in Bitcoin instead of fiat money.
This is at least the strategy millions of people are already pursuing today and more and more people join them every day. Binance has 38 million weekly visits! A large portion of them will have a portion of their portfolio invested in Bitcoin.
While working as a researcher in distributed systems, Dr. Christian Mayer found his love for teaching computer science students.
To help students reach higher levels of Python success, he founded the programming education website Finxter.com. He’s author of the popular programming book Python One-Liners (NoStarch 2020), coauthor of the Coffee Break Python series of self-published books, computer science enthusiast, freelancer, and owner of one of the top 10 largest Python blogs worldwide.
His passions are writing, reading, and coding. But his greatest passion is to serve aspiring coders through Finxter and help them to boost their skills. You can join his free email academy here.