*None of this is financial advice! Please do your own research before buying bitcoin.*
Since the historic, bloody event of March 12th, 2020, when the price of bitcoin dropped 50% in 1 day, its price has been in a constant uptrend. Going from ~$3,800 to $64,000 in roughly 1 year, bitcoin is in a historic bull run. Many people are making profit in bitcoin, and you’re wondering how you can get in on the fun.
But what does making profit mean in bitcoin? Whereas most think that profit means making more U.S. dollars, I disagree, and we can turn this argument on its head. Making profit in bitcoin is when your total satoshi count (the amount of BTC you own) goes up. In the end game, when fiat dies, the only thing that will matter is bitcoin. When counting profits, you need to use the correct unit of account. Bitcoin is that superior unit of account, not the downtrending U.S. dollar.
Now that you’re evaluating your wealth in BTC terms, what do you do? Do you trade bitcoin? Do you trade other cryptocurrencies? Do you try to time the market, buy low and sell high? Nope. The easiest way to make a profit in bitcoin is to buy and HODL. That’s it. Nothing complicated. It takes no time out of your day, and you don’t even have to think about it.
The beautiful thing about bitcoin is that it’s not investing, it’s saving. When you invest, you take the money you earned from your day job and invest it in assets like stocks and real estate in the hopes that you can turn a profit in the future by selling it. You have to take your money and buy assets with it, and your investments can turn out poorly. Saving is taking your earned money and simply saving it—not taking your bitcoin and investing into other assets hoping to make a return, but just letting it sit there and do nothing.
Saving in bitcoin is the best way to increase your purchasing power because of the hard-capped supply of 21 million BTC combined with its increasing user adoption. All you have to do is sit on bitcoin; there is absolutely no need to use your bitcoin to take on risk. As bitcoin was the best-performing asset of the last decade and is looking to be the best performing asset of this decade, one would be a fool to invest one’s bitcoin into other assets.
Bitcoin is not a giant bubble destined for $0; that is only something mainstream haters say when trying to discredit Bitcoin. Once you understand how the Bitcoin protocol works, you realize that there is little to no risk in using bitcoin as a savings vehicle. Its price fluctuations are just market participants reacting and have nothing to do with how Bitcoin is governed. Bitcoin goes through big booms and small bust cycles, eventually en route to infinity. Anyone buying or dollar cost averaging into bitcoin, making it their unit of account, is profiting. Get to the point where every time you stack more satoshis, you hit a new all time high, regardless of bitcoin’s current dollar price.
Please note: this works for bitcoin (BTC) only! The above does not apply to any other cryptocurrency.
This is a guest post by Nik Hoffman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.