After yet another day of heated debate in Congress, Americans are awaiting confirmation of their second stimulus checks by Monday.
According to reports, both Democrat and Republican parties are now in agreement – the new relief package will include another one-time stimulus check of $1,200 per person (and $500 per dependent) for all individuals earning $75,000 or less. There have been other accounts that indicate the income requirement could be as low as $40,000, however.
As unemployment remains at over 11% and many of the states are considering rolling back their reopening plans, most of us are looking forward to this welcome relief. Although many recipients will rush to deposit their checks into savings for a rainy day, here are the reasons why you should consider investing your $1,200 into Bitcoin instead.
The Federal Reserve’s balance sheet has increased by approximately $3 trillion since the start of the pandemic in March, or 14.3% of the 2019 GDP. We are likely to see an increase of $2 to $5 trillion more before the end of 2020. Although the U.S. has the privileged position of supplying the ‘world’s reserve currency’ making the U.S. Dollar in high demand during the pandemic, inflation is likely to catch up in the next 2-3 years, making your $1200 world less than before. Bitcoin, however, is a non-inflationary asset, with a finite amount of 21 million units, that has increased in price and adoption since its creation in 2009.
Hedge Against Wall Street
Wall Street is experiencing an unprecedented and unexpected boom during a crisis, decoupling from the Main Street economy. The value of the American stock market today is approximately $35 trillion, while the U.S. GDP has decreased to below $21 trillion. Many argue that this is the perfect recipe for a crash. Bitcoin provides a hedge against traditional markets as an uncorrelated asset.
Born on January 3rd, 2009, Bitcoin has steadily appreciated in price. An investment in bitcoin five years ago, yielded a 3300%+ return. While investing in the beginning of 2020, would yield a 38% return to date. Although Bitcoin can be volatile and is considered a risky investment (do your own research!), it has outperformed many of the traditional assets in the long term.
Institutional Investors Are Doing It
Once a fringe asset no one really understood, some of the biggest hedge funds and family offices globally are now investing in bitcoin. Established university endowments like Harvard, and billionaire hedge fund manager Paul Tudor Jones, have are buying bitcoin to diversify their portfolios.
“At the end of the day, the best profit maximizing strategy is to own the fastest horse. Just own the best performer and not get wed to an intellectual side that might leave you weeping the performance dust because you thought you…