- Bitcoin aims to bring power back to the people, and a calculated investment in it can potentially bring one closer to financial freedom.
- Hodling (holding) Bitcoin has proven profitable over the long-term, with mean annual returns of up to 93.8%.
- Other strategies for achieving financial freedom using Bitcoin include diversifying portfolios, investing in altcoins, or investing in DeFi projects.
Achieving Financial Freedom with Bitcoin
Bitcoin seeks to bring power back to the people and offers an opportunity for investors to achieve financial freedom. But how can one use Bitcoin as a tool for financial independence?
The Power of Hodling
One of the most popular strategies for achieving financial freedom with Bitcoin is hodling – crypto lingo for holding assets regardless of price movements. Historical data shows that setting aside a few off-years, holders witnessed a mean annual return of 93.8%, which in its best-performing year spiked to 302.8%.
However, hodling is easier said than done. The massive volatility of cryptocurrencies coupled with the restlessness of an investor can be a recipe for disaster if not managed properly. To counter this, some investors suggest buying the dips during bear markets and holding during bull markets.
Diversifying Portfolios & Investing in Altcoins
Another strategy used by investors seeking financial freedom is diversifying their portfolios into other digital assets like Ethereum ETH $1816 +1.05% MARKET CAP$209.03bVOL 24H$51.77b ETH $3924 or Litecoin LTC $147 +1.71% MARKET CAP$9.76bVOL 24H$636m LTC $271 . This allows them to hedge their investments against potential losses while also taking advantage of more aggressive gains from smaller market cap coins — something that would not be possible if they were only holding Bitcoin alone.
Additionally, investors may choose venture into newer technologies like decentralized finance (DeFi) projects or invest in Initial Coin Offerings (ICOs). While these come with higher risks due to various regulations and security issues, investing strategically can still offer lucrative returns on investment (ROI).
Staying VigilantAs attractive as these strategies might seem, it’s important to remember that investments should always be made cautiously following proper due diligence protocols and risk management techniques such as stop loss orders or limit orders where necessary — especially when dealing with volatile assets like cryptocurrencies where prices are unpredictable and highly speculative at times due to FUD (fear uncertainty and doubt).
In conclusion, while there is no guaranteed path towards attaining financial freedom through investments in cryptocurrencies like Bitcoin, combining principles such as hodling along with portfolio diversification could lead holders closer towards achieving their goals without taking on too much risk at any given time.