Even though the price has dropped to an 18-month low, Bitcoin is still at least 73% more profitable than major investment products like the S&P 500, gold, Dow Jones, and the PIMCO Active Bond ETF, according to Saifedean Ammous, the author of The Bitcoin Standard.
Ammous posted a simple calculation on social media assuming an individual has saved $100 monthly for the past 5 years. If they invested that amount in Bitcoin, the investment would amount to $29,212 today.
The next most profitable option is the S&P 500 – which can reach $7,743 today, 73% lower than Bitcoin.
Ammous admits BTC may not be profitable in the short term. That’s why traditional investors treat it as a failed asset because they tend to think in 3-month intervals.
If investors can look beyond the short-term returns brought about by daily fluctuations, they will see the stability and profitability of Bitcoin in the long term.
“Anyone who thinks Bitcoin has failed as a way to beat inflation needs to present how his portfolio allocation has beaten bitcoin over the last five years, and more importantly, how he intends to beat it over the next five.”
At the end of the thread, Ammous reviews possible investment options that can be used as an inflation hedge. Then he offered a reason why it all didn’t work out:
“In other words: the choices are bitcoin or poverty.”
Low-risk investment behavior, saving cash continuously for many years reduces asset values due to increasing inflation.
Pursuing short-term profits through opening short positions can be highly profitable immediately but unstable in the long run. Therefore, this approach cannot provide an adequate hedge against inflation.
Commodity money variants like gold also do not provide enough returns over the years to avoid inflation, as seen from the simple calculation above.
Senior commodity strategist Mike McGlone agrees with the outlook. After analyzing the market and adoption rate, he expects Bitcoin adoption to skyrocket in the near future, pushing the price as high as $100,000 by 2025.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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