For everyone interested in cryptocurrency, it is clear that Bitcoin was launched as a powerful tool to bring back the power and freedom to people. But how is that possible?
For the last 14 years, many investors have shown interest in Bitcoin, and there are many reasons for that. It can bring a solution to the current fiat economic system, and help reach an unbanked and diversifying portfolio. For many, Bitcoin is a gateway to financial freedom.
As we know, traditional banking systems are a tool for centralized governments to dictate financial access, especially during hard times.
The most recent example is the Ukraine-Russian war, where cryptocurrencies helped the displaced and unbanked access funds.
From the beginning it was said that Bitcoin has an aim to bring power back to the people, without any regulations, sanctions or bans stopping them from using the digital currency.
Moreover, a Bitcoin investment can bring people closer to the financial freedom everyone talks about. But how?
Hodl
As we know, cryptocurrencies are extremely volatile, and can bring huge profits, as well as instant losses. The important thing to say here is that Bitcoin, unlike many other digital currencies, is a long-term investment. It is not a surprise that crypto veterans recommend holding the asset during bull markets and buying the dips during bear markets.
Researches show that Bitcoin holders have seen an annual return in its best performing year, of more than 300%.
Although it sounds easy, holding is difficult for many investors because of many different factors, such as fear, and price movements.
Dollar-cost averaging
Many investors consider the fact that Bitcoin is a viable long-term investment, and tend to implement the dollar-cost averaging strategy. This means they set aside a predetermined dollar amount from a regular income to be invested in Bitcoin, for a given period of time.
If we have a look at El Salvador, there were many critics for its decision to adopt Bitcoin as a legal tender. However, the country repurposed the resultant gains to fund different social projects.
With the Bitcoin bull run, the president of El Salvador followed a similar to the dollar-cost averaging strategy, where the county purchased 1 BTC every day, with a BTC price of $16,600.
Since then, the price of Bitcoin has surged 40%.
Truth is, a similar strategy is recommended to investors, looking for financial freedom.
Self-custody
Self custody is extremely important when talking about cryptocurrencies. The truth is that when it comes to long-term holding of Bitcoin, you should not trust any third party with your private keys. So, if you choose to keep your Bitcoin on a crypto exchange, you give away complete control of your assets.
Keep in mind that maintaining the ownership of your private keys is the most important thing if you are looking for financial freedom.
Of course, hardware alternatives for crypto self-custody require an investment, they are the best way to store your private keys.
Conclusion
As we can see, holding (hodling), dollar-cost averaging and self custody are the basics of financial freedom. Of course, there are many other strategies you can try, that suit your needs.
However, remember that cryptocurrencies are highly volatile and can bring both great incomes, and massive losses. Before you jump into investing in Bitcoin or other digital assets, do your research, and never invest more than you are willing to lose.
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