Is it possible to achieve financial freedom with Bitcoin?

Over the past 14 years, investors got attracted to Bitcoin (BTC) for galore reasons— from fixing a flawed fiat system and reaching the unbanked to diversifying portfolios. However, a ample information of the wide nationalist sees Bitcoin arsenic a gateway to fiscal state amid increasing fiat ostentation and geopolitical uncertainties.

Traditional banking systems have, clip and again, served arsenic a instrumentality for centralized governments to dictate fiscal access, particularly during dire situations. Most recently, the Ukraine-Russian warfare served arsenic a lawsuit survey for how cryptocurrencies helped the displaced and the unbanked entree funds for basal necessities.

As intended by the creator Satoshi Nakamoto, Bitcoin aims to bring powerfulness backmost to the people. This means that nary magnitude of regulations, sanctions oregon bans tin halt 1 from utilizing Bitcoin arsenic money. Beyond that, a calculated concern successful Bitcoin has the imaginable to bring 1 person to attaining their imagination of fiscal freedom. But however does 1 bash that?

Hodl

The monolithic volatility of cryptocurrencies coupled with the restlessness of an capitalist is simply a look for an instant loss. What galore neglect to recognize is that Bitcoin — dissimilar cryptocurrencies — is simply a semipermanent investment. Hence, Bitcoin veterans urge holding the plus during bull markets and buying the dips during carnivore markets.

Setting speech a fewer disconnected years, Bitcoin holders witnessed a mean yearly instrumentality of 93.8%, which astatine its best-performing year, spiked to 302.8%, reveals data from UpMyInterest.

Historical summary of Bitcoin yearly returns. Source: UpMyInterest

As elemental arsenic it sounds, hodling (a crypto lingo for holding assets) has proved to beryllium a hard feat for investors. Some of the factors that trigger abrupt Bitcoin selling see an ongoing FUD (fear, uncertainty and doubt) and terms movements.

While it makes consciousness successful the short-term to gain profits disconnected Bitcoin’s volatility, zooming retired the terms illustration reveals there’s a semipermanent greater inducement successful holding. Moreover, investors owning Bitcoin volition ever person the enactment to utilize this spending crossed geographical boundaries without losing value.

Dollar-Cost Averaging (DCA)

Considering Bitcoin arsenic a viable semipermanent concern option, galore investors thin to instrumentality the dollar-cost averaging (DCA) strategy. This involves mounting speech a predetermined dollar magnitude from a regular income to beryllium reinvested successful Bitcoin each month.

While El Salvador was initially criticized for adopting Bitcoin arsenic a ineligible tender amid crippling inflation, the state could repurpose the resultant unrealized gains to money societal projects specified arsenic building hospitals and schools, among others.

With the Bitcoin bull tally moving retired by 2022, El Salvador President Nayib Bukele followed a strategy akin to DCA, wherein the state would acquisition 1 BTC each day.

We are buying 1 #Bitcoin each time starting tomorrow.

— Nayib Bukele (@nayibbukele) November 17, 2022

Back erstwhile Bukele announced his program for a Bitcoin prescription, Bitcoin was priced astir astatine $16,600, shows information from Cointelegraph Markets Pro and TradingView.

Bitcoin terms question ever since Nayib Bukele announced plans to acquisition 1 BTC each day. Source: TradingView

Since then, the Bitcoin terms has surged 40.46%, providing much-needed alleviation to Salvadoreans. Investors looking for fiscal state indispensable delve into a akin strategy portion being reactive to marketplace changes and wide nationalist sentiment.

Self-custody

When it comes to the semipermanent holding of Bitcoin, the cardinal is not to spot immoderate different third-party entity with the backstage keys of the assets. Investors who store Bitcoin connected crypto exchanges unknowingly springiness distant implicit power of their assets.

Ever since the FTX fraud came to light, the lawsuit of self-custody grew stronger. Investors that suffered losses owing to the alleged misappropriation of funds realized the value of self-custody. Maintaining ownership of the backstage cardinal — via wallets (hardware/software/physical) — becomes paramount for those that question fiscal state successful its truest sense.

Will beryllium sending an email each week powerfully advising our radical to ne'er support savings connected immoderate exchange, including @paxful This is the mode ! Self custody your savings ALWAYS! pic.twitter.com/DI95Gaa5Y6

— Ray Youssef (@raypaxful) December 11, 2022

The FTX fallout besides forced crypto exchanges to beryllium the beingness and information of users’ funds successful bid to debar a debased liquidity situation.

Binance Releases Proof of Reserves System | Binance Support https://t.co/pdA2OdvAKG

— CZ Binance (@cz_binance) November 25, 2022

Although hardware alternatives for crypto self-custody necessitate an upfront investment, it is up to the users to take an perfect method of storing the backstage keys — adjacent if it means writing down the backstage keys connected a portion of paper.

The 3 practices mentioned supra — hodl, DCA and self-custody — signifier the main pillars of fiscal freedom. However, users are not constricted from trying retired immoderate different strategies that tin suit their unsocial needs.

Finally, to reply the question — yes, achieving fiscal state with Bitcoin is possible. Given the nascency of the crypto ecosystem, investors are advised to absorption connected the semipermanent benefits of Bitcoin portion reaping short-term gains successful the process.