Bitcoin: A Small Slice of a Curious Future

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Bitcoin. It’s a funny thing, isn’t it? A digital nothing, really, that people are assigning very real value to. And, increasingly, a lot of it. Now, I’m not one for chasing every shiny new object – I’ve seen enough of those come and go – but dismissing Bitcoin out of hand feels… unwise. Not because it’s a guaranteed path to riches – nothing ever is – but because, as an investor, you really ought to understand what all the fuss is about. A small holding, perhaps 5% of a portfolio, feels… reasonable. It’s a bit like insuring against a very specific, and admittedly improbable, disaster. You hope it never pays out, but you’re glad you have it just in case.

It Can Hedge Against Inflation (Sort Of)

Inflation. The silent thief of purchasing power. It’s been eroding the value of money for centuries, and it shows no sign of stopping. Bitcoin, at least in theory, offers a potential escape hatch. Unlike traditional currencies, which governments can print at will, there will only ever be 21 million Bitcoins. Scarcity, you see, is a powerful thing. Close to 20 million are already in circulation, which is a bit like knowing there are only a finite number of first editions of a particularly desirable book. It doesn’t guarantee the price will go up, but it does create a certain… tension.

Now, calling it a foolproof inflation hedge is, frankly, a bit optimistic. History suggests it’s more nuanced than that. When people are generally worried about the cost of living, Bitcoin can often act as a store of value. But during a full-blown crisis, like the early days of the pandemic, it tends to stumble around like a bewildered tourist. Gold, in those situations, has a longer track record of stability. So, think of Bitcoin as insurance against long-term currency debasement, not a month-to-month shield against rising grocery prices. It’s a bit too volatile for that.

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It’s the Crypto Sector’s Core Asset

The world of cryptocurrency is, let’s be honest, a bit bewildering. Hundreds of different coins, each with its own unique promise and, often, its own set of questionable motives. Bitcoin, though, remains the dominant force. It accounts for roughly $1.4 trillion of the entire $2.5 trillion crypto market. That’s like finding out that one particular brand of coffee bean accounts for the vast majority of all coffee consumed. It doesn’t necessarily mean it’s the best bean, but it does suggest it’s the one people are most comfortable with.

Historically, when Bitcoin goes up, most other cryptocurrencies tend to follow, albeit with a bit of lag and a lot more drama. Trying to pick the “next Bitcoin” is a bit like trying to predict which obscure band will become the next Beatles. It’s possible, of course, but the odds are stacked against you. Owning a small amount of Bitcoin, therefore, offers a relatively easy way to gain exposure to the crypto sector as a whole, without having to wade through the complexities of altcoins.

It’s Now Quite Easy to Hold in a Retirement Account

For a long time, getting involved with Bitcoin required a certain level of technical expertise and a willingness to navigate the murky waters of crypto exchanges. It was a bit like trying to buy a rare stamp from a collector who only accepts payment in rare seashells. Thankfully, things have become a lot simpler. Bitcoin exchange-traded funds (ETFs) now make it possible to buy and hold Bitcoin within a standard brokerage or retirement account. It’s remarkably convenient.

Interestingly, an increasing proportion of Bitcoin is being held by long-term investors – countries, companies, ETFs, and the like. More than 4 million Bitcoins are currently in their possession. These entities are unlikely to sell on a whim, which means that the supply available to the general public is shrinking. If demand continues to grow, and these long-term holders continue to hold, the price will likely be biased upward. And if that happens, those of us who own a small amount of Bitcoin will benefit, too. It’s a curious situation, really. A digital nothing, held by increasingly conservative entities, potentially driving up the price. It’s enough to make you wonder what we’re all doing here.

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2026-02-08 08:32