Our current economic chaos has made me think about the future. Even if it’s going to be a while before I retire, it’s always better to get ready in advance. To be honest, my retirement portfolio is close to non-existent but I’ve got quite a few crypto coins in my wallet, and so I thought, “Can you count on Bitcoin for your retirement?”
First of all, all the pension capital funds today are a bit shaky. During a crisis, it is fair to expect that almost every country in the world would allocate federal funds to support its economy. In this context, the risks of your retirement plans are higher, especially if you’re over 50.
But who can borrow your crypto assets in order to support their interests? Unless you’re careless with your private keys, no one can ever touch your Bitcoin. Just make sure that by the age of seventy you still remember your mnemonic.
The thing is, our world is changing rapidly. Today even the world’s strongest economies are struggling. A lot of people have realized they have to be their own saviors. So if you have a chance to invest in an asset unrelated to the government system and backed by innovative technology, why not take it? Diversifying your investment portfolio will increase your chances of doing well in the long run so you might as well invest in a stand-alone decentralized digital currency.
Volatility and Inflation
Crypto is volatile and volatility is tricky. In 2017 Bitcoin was close to $20k, while earlier this year its price fell below $4k. It is better not to trust just one highly volatile type of asset with your retirement savings. At the same time, in the future, one Bitcoin (or brave new altcoin) may be worth a fortune.
What about fiat currencies? It’s no secret that financial crises cause inflation. Some people say the current one might be the biggest recession since the great depression. If that prediction checks out, your retirement funds, if made in dollars or euros, are in danger. And unfortunately, it’s not going to be the last recession we witness. Long term devaluation of fiat currencies can annihilate years of consistent savings.
The Bottom Line
I decided to take things slow as my retirement is not even on the horizon. For now, I’ll stick to investing in crypto as it is easier and familiar until I save enough to try my luck with techie startups. As for the rest, I’ll do it the old-fashioned way.