Disclosure: Our content isn't financial advice. Do your due diligence and speak to your financial advisor before making any investment decision. We may earn money from products reviewed. (Learn more)
February was a record month for Bitcoin, as BTC hit $50,000 (wait, $58,000) for the first time in its existence. Momentum is on Bitcoin’s side, and there’s no indication that the cryptocurrency will hit the brakes any time soon.
It looks as though institutional money is just getting started with Bitcoin. Tesla (TSLA) bought $1.5B of the cryptocurrency this past month, and the big investment banks—including Goldman Sachs, JPMorgan, and Morgan Stanley—have all gone public with their interest in crypto in the last six weeks.
On the adoption side, PayPal, Tesla, and MasterCard have announced that they’re going to be working to integrate Bitcoin into their payment systems. Mass adoption by payment processors might give Bitcoin the catalyst it needs to finally go mainstream and compete with the dollar.
Economic Disaster Ahead for America?
Meanwhile, the new Biden administration signed off on a $1.9T COVID relief package (yes, trillion) that will inject a flood of new money into circulation. This might provide short-term assistance for those of us who need it, but eventually we’ll have to foot the bill. And it won’t be pretty. In fact, the U.S. dollar might never recover from its scarring.
European investors would’ve yielded 5% in U.S. dollar terms in the first eight months of 2020 by investing in U.S. markets (S&P 500). But when those gains are translated back to euros, the yield drops to 0.5% due to the extreme depreciation of the dollar.
Source: The Conversation
There’s no doubt that the dollar has gone soft, and likely no amount of fiscal stimulus will revive it any time soon. At the same time, the world is waking up to the cryptocurrency revolution. Bitcoin is sound money that is mathematically resistant to manipulation and devaluation.
Protect Your Wealth: Diversify Your Portfolio in March
Last week, we dropped an article on the importance of a diversification strategy to manage risk in your retirement investing portfolio. If you want true diversifiers that can hedge against the volatility of the stock market and the devaluation of the dollar, Bitcoin, silver, and gold might be the move for you.
Don’t get left behind. For deep diversification in your portfolio, consider opening a Bitcoin IRA and allocating some of your wealth to cryptocurrencies. You can get started by checking out our list of the best bitcoin IRA companies for March 2021.
For added security, consider making a move into precious metals. History has proven that physical gold and silver are resilient assets that hold their value when financial markets reel from recessions. Before making a play in gold, silver, or platinum metals, first check out our exclusive list of the top precious metals IRAs on the market.
Mark Turner is an author and editor at Sophisticated Investor. He has over two decades of experience in the financial industry as a broker in both Chicago and New York and has written for several top tier publications. He currently covers the topics of alternative investments, geopolitical events, US economy, portfolio diversification and others.
