Crypto — the best way to start saving for your children’s college education
Last year Bank of America named Bitcoin “the best performing asset class in the last 10 years”. If you would have paid $1 for Bitcoin in 2010, you would have $115,250 in 2020. This is a large difference compared to an investment in U.S. equities that would have turned $1 USD in 2010 to $2.5 USD today.
During the next decade the adoption of Bitcoin and other cryptocurrencies will continue to grow, which creates a great opportunity for every family to make savings for their children’s college education.
In this article we examine 3 major factors that make Bitcoin and cryptocurrencies the best option for your investments in 2020.
- Coronavirus effect — how to protect your savings from inflation, banking crisis and the stock market crash?
The coronavirus pandemic started a new global economic and financial crisis. The Gross Domestic Product (GDP) in all countries will decrease in 2020, while most governments started printing enormous quantities of new money to support their local economies. A decreased volume of goods and services and an increased global money supply can only result is one thing — inflation. So, if you keep your savings in cash, the upcoming inflation will wipe out a substantial portion of their value. Guaranteed. National currencies of tourism and travel dependent countries such as Thailand, Philippines, and Mexico will suffer the most, while currencies of oil-depending countries such as Venezuela, Russia, Brazil, and Colombia will depreciate due to the decreased global demand for hydrocarbons and their over-dependence on gas and oil exports.
At the same time, in every country small and medium-size businesses are hurt the most during the pandemic, and this year many of them will go bankrupt and fail to pay their bank loans. This will cause another global banking crisis, which means that if you keep your money in a small private bank, it’s time to withdraw your deposit — you are facing a very risk of bank insolvency.
Even investing your money in equities is no longer a good idea: since the beginning of 2020 the global stock market already lost 30% in value, and even the most successful investors, such as Warren Buffet, reported multibillion dollar losses in May 2020. Since we do not know the final effect of the coronavirus pandemic it’s safe not to gamble your money on the equity market.
Unlike many other financial assets, Bitcoin demonstrated a strong growth in 2020, because the value it creates is totally unaffected by the virus pandemic. On the contrary, in the time of a great economic turmoil investors have more trust and believe in a decentralized financial system, unaffected by failures of local economies, banks and healthcare systems.
2. Upcoming cryptocurrency regulation will drive their price up
Between 2020 and 2025 most countries will complete their cryptocurrency regulation. Why does it matter? First, when regulation matures more people and organizations will become comfortable with using cryptocurrencies, which means an increased demand for Bitcoin, because it is the largest and most popular cryptocurrency. Second, after regulation matures large institutional investors, such as pension funds and asset management companies, will start buying Bitcoin to diversify their investment portfolios. Even a small percentage of these trillion-dollar funds invested in Bitcoin will make its price to grow at least several times. This process started in 2019: Fidelity, one of the largest asset managers in the world, launched its digital platform on which institutional investors and individuals can securely store, purchase, sell, and transfer bitcoin.
If you buy Bitcoin before the regulation fully matures and cryptocurrencies become the mainstream, you will benefit from Bitcoin’s growing popularity and price growth.
3. Benefit from growing adoption of state-backed cryptocurrencies
In 2020 China will become the first country in the world to launch its national cryptocurrency — DC/EP (Digital Currency Electronic Payment). Largest Chinese banks such as Bank of China and the Agricultural Bank of China, two of China’s largest financial technology companies, Alibaba and Tencent, and the global payment system Union Pay will help Chinese government distribute the cryptocurrency to 1.3 billion Chinese citizens. It is highly likely that other countries will follow China’s example in order to upgrade their financial systems.
Similarly, in 2019 the largest US bank JP Morgan Chase launched its JPM coin to facilitate payments among institutional clients. This move was followed by Kakao Corporation, which launched its own cryptocurrency and opened wallets for more than 100 million users of Kakao messenger.
In the next few years over a billion people will start using cryptocurrencies on a daily basis for payments, savings and investments. Since Bitcoin is the most popular cryptocurrency, the demand for it will grow dramatically. Buying Bitcoin today is the most certain way to profit from the growing worldwide adoption of cryptocurrencies and secure a bright future for your children.
