Bitcoin vs. the S&P 500: The Battle for Your Portfolio in an Era of Extreme Monetary Inflation

In an era of extreme monetary inflation, investors are looking for ways to protect their wealth. Some are turning to Bitcoin, while others are sticking with traditional investments like the S&P 500.

So, which is the better investment? Bitcoin or the S&P 500?

Let’s take a closer look.

Bitcoin

Bitcoin is a digital currency that was created in 2009. It is not backed by any government or central bank, and it is not subject to inflation.

Bitcoin has been on a wild ride since its inception. In 2017, the price of Bitcoin skyrocketed from around $900 to over $20,000. After the next halving in 2020 the Bitcoin price then accelerated to $69,000 per coin. However, the price has since crashed back down to around $30,000. Read about the Bitcoin Bubbles Here.

Despite its volatility, Bitcoin has a number of potential advantages over traditional investments.

First, Bitcoin is a scarce asset. There will only ever be 21 million Bitcoins created. This scarcity could make Bitcoin a good hedge against inflation.

Second, Bitcoin is decentralized. It is not controlled by any government or central bank. This could make it more resistant to government interference.

Third, Bitcoin is global. It can be used to send and receive payments anywhere in the world. This could make it a good investment for people who want to protect their wealth from political instability.

The S&P 500

The S&P 500 is a stock market index that tracks the performance of 500 large companies in the United States. The index is a good measure of the overall health of the stock market.

The S&P 500 has historically outperformed inflation. Over the past 50 years, the S&P 500 has returned an average of 10% per year, after inflation.

The S&P 500 also has a number of advantages over Bitcoin.

First, the S&P 500 is more liquid. It is easier to buy and sell shares of the S&P 500 than it is to buy and sell Bitcoin.

Second, the S&P 500 is more diversified. It is not as risky as investing all of your money in Bitcoin.

Third, the S&P 500 is backed by the US government. This gives investors some peace of mind knowing that the government will not default on its debt. Might as well join the inflation party to pump your own stocks you know!?

Monetary Inflation

Monetary inflation is a general increase in prices and fall in the purchasing value of money. It is caused by an increase in the money supply, which can lead to a decrease in the value of each unit of currency.

The US government has been printing money at an unprecedented rate in recent years. This has led to a significant increase in the money supply, which has contributed to rising inflation. The truth is, at this point the US government can’t stop printing. They need to print to even pay off their debts. There is no way out other than a re-shuffling of the deck so to speak.

Increasing US Debt

The US government is also facing a significant debt crisis. The national debt has reached over $30 trillion, and it is growing at an alarming rate.

The debt crisis is a major threat to the US economy. If the government is unable to repay its debt, it could lead to a financial collapse.

The Bottom Line

In an era of extreme monetary inflation and increasing US debt, investors are looking for ways to protect their wealth. Bitcoin and the S&P 500 are two popular options. Bitcoin is a risky but potentially high-reward investment, while the S&P 500 is a more conservative investment. The best investment for you depends on your risk tolerance and investment goals.

Here are some additional things to consider when making your decision:

Your time horizon: How long are you planning to invest your money? If you are investing for the long term, Bitcoin may be a good option. However, if you are investing for the short term, the S&P 500 may be a better choice.
Your risk tolerance: How much risk are you willing to take? Bitcoin is a volatile asset, and its price could crash at any time. If you are not comfortable with risk, the S&P 500 may be a better choice.
Your investment goals: What are you hoping to achieve with your investment? If you are looking for an investment with the potential for high returns, Bitcoin may be a good option. However, if you are looking for a more conservative investment and perhaps ha ve shorter time frame, the S&P 500 could be good options.

I say, why not both? Use a lever on the debt game that keeps expanding AND buy some Bitcoin as a part of the future of the world. Cheers Bitcoiners.

Please read our disclaimer here regarding investment advice and risk. Disclaimer: This should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. Please consult an appropriate tax or financial professional to understand your personal tax and financial circumstances. I may get compensated by some platforms mentioned below (because of referral links). Do your own research