You May Want to Copy the Direction Elon Musk Took this Year

Tom Handy

The value of money continues to decline as the growth of digital currencies grows. During the pandemic, the United States government pumped out dollar after dollar. This was to help the economy, businesses, and people who struggled because what was once a fictional movie turned into reality.

Austin entrepreneur Elon Musk recognized this.

The Wall Street Journal published:

The Labor Department said last month’s consumer-price index increased 5.4% from a year ago, the highest 12-month rate since August 2008.

You may not understand the details of the financial market, but you see the price of literally everything rising around you.

Kimberly Clark, the maker of items you use almost daily such as toilet paper, tissues, diapers, and other items, released a statement in March 2021.

The price of goods will increase “in the mid-to-high single digits” in June.

You can blame the current president or the last president, but either way, you need to look for an immediate answer. One area you can look to is digital currencies.

As the value of the value decreases because of inflation, many digital currencies have risen during the same time frame.

Here comes Bitcoin to save the day

In 2009, Satoshi Nakamoto created the first digital currency known as Bitcoin. Bitcoin is a peer-to-peer electronic cash system that does not directly involve the banking system.

You can buy Bitcoin on a cryptocurrency exchange or Bitcoin ATM similar to how you withdraw money from a bank. With Bitcoin, you receive the digital currency from a cryptocurrency exchange.

At the time of this writing, Bitcoin is worth $51,498.81.

Don’t be startled by the high number. You can buy a fraction of a Bitcoin for as little as $10.

The price of Bitcoin is expected to increase over time since there is a limited amount of Bitcoin available. Bitcoin can only have 21 million ever created according to Benzinga. Satoshi wanted to limit how many bitcoins they could create.

Compared to the dollar, the Federal Reserve can print an endless supply of the fiat currency. Fiat currency is only backed by the word of the government. The dollar used to be backed by gold until former President Richard Nixon took the dollar off the gold standard in 1972.

Over the years, the value of the dollar has decreased.

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Image created by Observations and Notes and modified with Canva

COVID influenced the shipping industry causing delays and higher prices. This helped speed up the cost of everyday goods.

The price of housing also saw a dramatic rise in price.

As the price of items rose, so did the price of Bitcoin which caught the eye of many investors and companies.

Tesla and others bought Bitcoin

In early February, Elon Musk announced that his company Tesla added Bitcoin to its balance sheet. Tesla bought $1.5 billion worth of Bitcoin.

A month prior, Tesla updated its investment policy to include bitcoin in its balance sheet.

Several other high-profile companies and wealthy individuals have also purchased Bitcoin.

PayPal added Bitcoin to its balance sheet.

Galaxy Digital and Square, now called Block, also have Bitcoin on their balance sheet.

Shark Tank co-hosts Mark Cuban and Kevin O’Leary came out publically announcing they owned Bitcoin in their portfolio.

Owning Bitcoin is a great way to balance your portfolio. Analysts recommend holding 2% to 5% of your portfolio in Bitcoin.

The price of Bitcoin fluctuates and with a larger portfolio size, a person could see a large amount of their portfolio drop.

Are you invested in Bitcoin or cryptocurrencies?

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