Buy Bitcoin because ‘your wealth is melting’ away — Unchained report

In the latest study published by Unchained, Bitcoin (BTC) is identified as a leading option and an effective means for savings in today’s economic landscape, surpassing conventional assets according to the findings.

According to recent studies conducted by Bitcoin financial services company Unchained, Bitcoin’s distinctive monetary features, such as its immutability and limited supply, make it an ideal answer for investors seeking to avoid the “innovation trap.”

Joe Burnett, an independent researcher, describes the innovation trap as a situation where the drive for innovation in free markets results in an oversupply of specific goods and services. This surplus leads to decreased prices over time, eventually devaluing those assets. In Burnett’s perspective, this process makes it challenging to save for the long term.

“In a world of abundance, hyper-productivity, and intensely competitive markets, storing significant wealth outside of Bitcoin will be increasingly difficult.”

Luckily, according to Burnett, we’ve found the trap. This brings us near the point of economic convergence where most affluence is concentrated in Bitcoin.

“Your wealth is melting”

Unchained discusses how every type of investment, such as fiat money, stocks, gold, and property, may see their worth decrease due to rising supplies over the long term.

Over time, holding the U.S. dollar and other non-backed currencies, such as fiat currencies, will result in a decrease in their purchasing power relative to fundamental consumer goods.

The report pointed out that these currencies lose value relative to items with easier production processes, such as housing, nourishment, and energy.

“The U.S. dollar is down 92.8% over the last 5 years.”

Buy Bitcoin because ‘your wealth is melting’ away — Unchained report

According to Burnett’s perspective, with an increasing number of individuals understanding that money losing value against fundamental consumer items is not a wise choice for saving, they opt to keep their savings in alternative investments like stocks, precious metals including gold and silver, or real estate instead.

Based on the research results, the 20-year Treasury Bond ETF has decreased by over 94.8% in the past 5 years. Stock investors encounter various risks arising from intense competition and equity dilution – the release of additional shares into the market, which reduces the worth of previously held shares.

“As markets become more efficient and competition intensifies, excess profits (alpha) are ultimately driven down toward zero in the long run, along with the market value of the equity.”

Using the S&P 500 as a reference, the findings indicated a decrease of approximately 87.6% in its value over the past five years.

In his observations, Burnett noted that the impact of heightened production abilities and intensified competition isn’t limited to commodities other than gold and silver.

In the 19th century, gold production was relatively low, hovering around 100 tonnes per year. However, by the 1950s, advancements in mining and processing technology had significantly improved gold extraction, allowing for an annual yield of around 1,000 tonnes. Today, with continued technological progress, global gold production has surpassed 2,800 tonnes each year.

“The potential circulating supply of gold has no serious limit, and gold holders will have their savings endlessly devalued as humanity becomes more productive at mining and extracting gold.”

Buy Bitcoin because ‘your wealth is melting’ away — Unchained report

Bitcoin – the new economic reality

The research results aligned with Burnett’s perspective expressed in the past, in which he emphasized that Bitcoin represents an excellent monetary instrument due to its “unalterable limited availability,” making it impossible to be printed or increased at will.

In the report, he showed that Bitcoin had more desirable monetary features than other investment types. He argued, “It makes perfect sense and is a wise decision to consider and measure conventional wealth holdings using this superior asset instead.”

Buy Bitcoin because ‘your wealth is melting’ away — Unchained report

The fundamental value of Bitcoin as a savings instrument lies in its immutable scarcity. This feature will become even more crucial following the upcoming halving, scheduled in four days. During this event, the production of new Bitcoins is projected to decrease from 6.25 per mined block to 3.125.

Michael Saylor, known for his strong support and advocacy for Bitcoin, shares the view that Bitcoin outshines other investment classes.

Buy Bitcoin because ‘your wealth is melting’ away — Unchained report

In simpler terms, Burnett expressed his viewpoint that the emergence of Bitcoin fifteen years ago, as an innovative method for saving, trading, and making economic calculations, has led to a new economic situation that we cannot afford to disregard.

“If you ignore it and continue saving in inferior assets at high valuations, your economic competitors will adopt it and outcompete you.”

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2024-04-15 18:15