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Ep. 029: Buying bitcoin as hedge against inflation and financial crisis

by | Aug 6, 2018

A listener sent in an Ask Kim question asking if buying bitcoin as hedge against inflation makes sense? What are the pros and cons of Bitcoin over gold and traditional strategies?

“Hi Kim- I’m enjoying your explanations and evaluations as usual. I have a question that I thought you might (or might not) want to address, in view of the current political climate in our land. If inflation is impending, what stability (or lack thereof) can obtaining cryptocurrency in advance of rampant inflation provide?”

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“The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital.”.

— Warren Buffett

In response to Nancy’s question, we talk about:

✓ What is inflation? Hyperinflation? Crisis falls along a pretty broad spectrum.

✓ Bitcoin to hedge against inflation is another reason to own it and a very powerful one

✓ The two goals of asset allocation

✓ The experience in countries like Greece, Zimbabwe and Argentina

✓ Traditional hedges against inflation and financial crisis

✓ The pros and cons of using bitcoin as hedge against inflation compared to gold

✓ Always plan for the best but prepare for the worst

✓ Reacting is always, always, always an investment mistake

✓ investing is not risky. It is a lifeskill. Like swimming. The risk is in NOT investing.

TO DIVE DEEPER INTO BITCOIN TO HEDGE AGAINST INFLATION:

Inflation (Investopedia) The Great Inflation – Bryan (Federal Reserve History)

It’s nearly impossible to afford a cup of coffee in Venezuela – Kight (Axios)

Warren Buffett explains how to invest in stocks when inflation hits markets – Rosenfeld (CNBC)

Ep. 005: Where Does Cryptocurrency Asset Class Fit in an Overall Portfolio? – (SANE CRYPTO Podcast)

The Bullish Case for Bitcoin (part 2 of 4) – Boyapati (Medium)

Bitcoin is breaking all kinds of price records in cash-strapped Zimbabwe – Karombo (Quartz)

Greek crisis stokes bitcoin prices higher – Rosenfeld (CNBC)

Why Venezuela’s Currency Crisis Is A Case Study For Bitcoin – Rand (Forbes)

Ep 022: How I Learned to Love Cryptocurrency Market Volatility… and You Can Too – (SANE CRYPTO Podcast)

QUESTIONS OR FEEDBACK:

Email: askkim@sanecrypto.com
Twitter: @sanecrypto https://twitter.com/sanecrypto

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