Getting rich is difficult and staying rich isn’t easy either. As the saying goes “The first generation makes it, the second generation spends it, and the third generation blows it”. Unless money is wisely invested it will quickly leave you behind and go to someone else.
Rich people who buy Bitcoin see it in a similar way as all the other Bitcoin “hodlers”; an alternative asset class and a different way to make money. Diversification is an important part of maintaining wealth if you have all of your eggs in one basket you can lose all of your money. I do not think anyone should keep all of their wealth in cryptocurrencies but to not have any cryptocurrency at all is similar to not having any stocks, bonds, precious metals or real estate. Staying away from Bitcoin and other cryptos gives you less diversity and less opportunity to make money.
Some Advantages of Bitcoin
- Bitcoin is not tied to any government or corporation. This means that it could be decoupled from the traditional financial markets and be a hedge against global systematic risk.
- It’s cheap and easy to send Bitcoin to anyone in the world in a short amount of time.
- Bitcoin has a limited supply of 21 Million and therefore could really pump in value if demand increases.
- You can easily carry your Bitcoin with you wherever you go. This means that someone like a Syrian refugee could carry wealth with them right into their new country.
- Bitcoin has never been hacked and is more secure than credit card companies and banks. It also does not require KYC so your personal information is secure.
Conclusion
The rich will use any method they can to maintain and grow their wealth. Bitcoin seems to be an excellent vehicle for storing and growing wealth.
There is a lot to learn about Bitcoin and cryptocurrencies. I highly suggest anyone who buys cryptocurrencies educated themselves first. I run a Quora Space dedicated to educating people about cryptocurrencies; if you are interested check out The Crypto Cave.
