?? Backup Money

The Euro is at its lowest level in 20 years.

The British Pound hit its all-time-low against the Dollar last week.

The type of inflation that people in the West only heard about from “far away” countries like Zimbabwe or Venezuela, is now also coming for our currencies.

This is the time that bitcoin was created for. Until now, bitcoin had been viewed by many people as just a tool for speculation. For people in Zimbabwe and other countries with high inflation it has been a safe haven for their money, though.

How can you call something as volatile as bitcoin a “safe haven”??

Yes, there is short-term volatility in bitcoin. However, due to its limited supply of 21 million coins, it can’t be inflated like our fiat currencies. That means, if you zoom out and focus on the long term, the choppy price chart of bitcoin shows only one direction: up.

This is the opposite of what’s happening to fiat currencies. Never in the history of humankind has so much currency been printed as in the last two years. We see the impact of that now, with inflation numbers in the double digits for the Euro and the US Dollar.

While those inflation percentages may only be meaningless numbers to you when you hear about them on the news, you?feel?them when everything gets more expensive. Whether it’s your rent going up or your coffee in the morning or the groceries you buy.

Digital nomads like myself feel it when Airbnb prices in every single European city are so high, that the number of places we can afford to live in is rapidly shrinking.

The thing is, if your currency loses 20% of its value, you should also earn 20% more. If you are employed - do you think you’ll get a 20% raise for the same kind of work this year? If you’re an entrepreneur, do you think your clients will willingly pay 20% more for the same kind of service, when they are already paying more for everything else in their life? So what’s the alternative? Get a second job. Move into a cheaper apartment. Sell your house… it’s a downward spiral that ends up in stress and poverty.

A different perspective

Rather than everything becoming more expensive, if you measure things in bitcoin, things are becoming cheaper. In fact 98% cheaper:

So wouldn’t it be nice to have bought some bitcoin five years ago? Of course! Everyone who starts to understand bitcoin regrets they didn’t buy it sooner. But here’s the thing: As long as you don’t have a problem that you think bitcoin can solve, you’re simply not motivated to study bitcoin. That’s why you never seriously looked into it until now.

People in Zimbabwe and other countries with high inflation understand instantly how bitcoin can solve their problem. They’re not interested in speculating with bitcoin. They are looking for a store of value for their money. They want to be able to save money for the future, which they can’t do right now, because they know that every day their currency will be worth less than the day before. In other words, everything will be more expensive tomorrow. So you’d better buy all essentials today. You’re constantly forced to spend your money and you have no chance to put some of it aside for the future.

Everyone in their own time…

I noticed I had a problem seven years ago: my pension plan that I had started ten years earlier wasn’t going anywhere, and I was looking for a “Plan B”. I heard about bitcoin, studied it for a year, and once I understood it and felt confident enough, I bought my very first bitcoin on January 3, 2017.

I’m glad I did. However for the past six years I’ve been the only one amongst my friends who was “in bitcoin”. Since last week, that’s changed. Everyone of my close friends is now putting some money into bitcoin, no matter how small the amounts.

Why? Because inflation caught up with them. Now that their too-big-to-fail currencies are affected, they realised they have a problem that bitcoin can solve. Now it’s part of our conversations, and every single one of my friends is wondering, “How come the Euro is worth less than the Dollar, suddenly? Why did the Pound drop so much? How can I keep?my?money from losing value?”

Most of them started putting €10-50 in bitcoin every month in their?Revolut?account. Yeah, it’s not the best way of holding your bitcoin, but it’s the easiest first step. Now that they have skin in the game and will educate themselves more, they will ask the right questions about self-custody soon enough.

And yeah, they won’t use those coins to buy coffee any time soon. They’re just using it to store the value of their savings. For now.

Bitcoin is Backup Money

That’s what everyone is using it for during these times. Including myself. While opinions differ, hardly anyone is using bitcoin as a means of exchange yet. Maybe they’ll never will.

Critics claim that that makes bitcoin useless. Proponents say that bitcoin is “savings technology” and there’s no better way to preserve your wealth - as long as you have a long enough time horizon to survive the short-term volatility without panicking.

My portfolio is about 55% down since the beginning of this year. But it’s also 60% up since the beginning of last year. And it’s about 1,000% up from when I bought my first bitcoin in early 2017. I don’t care about short-term volatility.

Do you have a backup plan?

If you feel it’s time to learn how to buy and store your first coins safely, consider?booking a private session?or become a paid subscriber to?ASK ANJA. My eGuide?How to stay safe in the crypto space?is also a great way to start, if you’re serious about self-custody and truly owning your funds.

Enjoy your Sunday,

Anja