Bitcoin (BTC) has been identified as the optimal solution for saving in the current economic era, surpassing traditional assets, according to a research report released by Unchained, a Bitcoin financial services firm. The report highlights Bitcoin’s superior monetary properties, such as immutable scarcity, which position it as the ideal remedy for the “innovation trap” faced by investors. Unchained researcher Joe Burnett defines the innovation trap as a situation where an increase in the supply of certain goods and services, driven by market forces, results in low prices and the devaluation of assets over time, thereby undermining long-term savings.
The report unveils the vulnerability of traditional assets, including fiat currency, stocks, gold, and real estate, to an increasing supply, leading to a decline in their value over time. For instance, holding the US dollar and other fiat currencies results in their devaluation against basic consumer goods. Currencies are designed to depreciate against goods and services that can be produced faster and cheaper, such as shelter, food, and energy. As a result, people are turning to alternative assets like stocks, gold, silver, and real estate in an attempt to preserve their savings. However, Unchained’s findings indicate that these assets are also diminishing in value. The 20-year Treasury Bond exchange-traded fund (ETF) has declined by over 94.8% in the last five years, while stock investors face various risks due to intense competition and equity dilution, resulting in a decrease in the value of existing shares. Even gold and silver are not immune to the effects of increased production capabilities and competition. The annual rate of gold production has steadily risen over the years due to technological advancements, making it easier to extract gold.
The report emphasizes that Bitcoin represents a new economic reality. Burnett previously argued that Bitcoin is one of the best monetary tools due to its immutable absolute scarcity, as no additional Bitcoin can be printed. He highlights Bitcoin’s superior monetary properties and suggests that traditional storeholds of wealth should be measured against this superior asset. Immutable scarcity is the foundation of Bitcoin’s value proposition as a savings tool and will become even more significant after the upcoming Bitcoin halving, which will reduce the issuance from 6.25 BTC to 3.125 BTC per mined block. Renowned Bitcoin advocate Michael Saylor also believes that BTC surpasses other asset classes.
In conclusion, Burnett asserts that Bitcoin’s emergence 15 years ago as a novel savings, trade, and economic calculation tool has created a new economic reality that cannot be ignored. However, it is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.