Beat the boomers: How Bitcoin can protect your savings
Your money won’t grow in a traditional bank account. That’s why investors are using Bitcoin to earn interest on their savings.
If your savings are just sitting in a bank account, they’re losing value. Fast.
We’ve all had that lecture from a relative about how they had three houses and a sports car by the time they were 30. But they could also buy a house with pocket change and earned upwards of 3% on their savings from traditional banks. Well, like it or not Grandad, those days are over.
The good news is that, while traditional banks aren’t much help, you can still use cryptocurrency to grow your wealth. But what is inflation and why is it draining your savings?
What is inflation and why does it affect me?
Inflation is when currency loses its purchasing power. This means that while your bank balance might stay the same, it is technically worth less the longer it stays there. But how does that work?
Most countries in the world use fiat currencies. A fiat currency’s value is guaranteed only by the ongoing existence of the government that issues it. In this sense, If a country falls apart, its currency becomes worthless.
Governments are free to print as much of their own currency as they want. Every new note decreases the value of those that already exist.
We can track the rate of inflation by monitoring what a certain amount of currency can buy over time. If prices have gone up in that period, the currency buys less. Since 1911, inflation has increased by over 3 percent every year. That means that prices today are nearly 28 times higher than they were 110 years ago.
How can I avoid inflation?
People got fed up with inflation and central banks messing up the economy. So they invented cryptocurrency.
Bitcoin, along with most other cryptocurrencies, has a special feature to eliminate the effects of inflation: only 21 million Bitcoin tokens can ever exist. This is called a hard cap.
While dollars and other fiat currencies can be created out of thin air by central banks, new Bitcoin is created every ten minutes until the hard cap is reached. This means that Bitcoin’s inflation rate will continually shrink to zero.
But how does that help my savings? Because of the hard cap, the available supply of Bitcoin will decrease over time. This coincides with a growing demand for Bitcoin. The combination of these two factors and the fact that Bitcoin cannot be created from nothing causes prices to shoot up. Analysts are bullish long term about Bitcoin’s price, which means that Bitcoin savings could increase in value.
Beating inflation with Bitcoin
Savings in fiat currencies lose their value through inflation. Savings in Bitcoin don’t.
For perspective, the U.S. Federal Reserve printed over $9 trillion of new dollars in 2020. All existing dollars, in a bank or otherwise, lost value. Bitcoin, on the other hand, increased by over 600 percent. That’s why people who are already investing in Bitcoin have seen their wealth soar.
New technologies like cryptocurrency show that a whole new reality of banking is possible. With Nuri you can future proof your finances against inflation and earn up to 3% interest on your Bitcoin per year.
The mainstream financial world is struggling, which means there is no better time to protect your savings and improve your future. If you dare to look beyond the world of traditional banking, you can grow your money even in the most difficult circumstances.