Buy Bitcoin Because ‘Your Wealth Is Melting’ – Unchained Report

Buy Bitcoin Because 'Your Wealth Is Melting' - Unchained Report

Bitcoin (BTC) is emerging as an alternative and “best tool” to save in this new economic era compared to traditional assets, claims a new research report from Unchained.

Bitcoin financial services firm Unchained's latest research findings show that Bitcoin's superior financial assets, including its consistent scarcity, make it the best solution to the “innovation trap” investors face.

Unchained researcher Joe Burnett describes the innovation trap as a situation in which free market forces driven by innovation lead to the supply of certain goods and services, which leads to lower prices and ultimately depletion of these resources. According to Burnett, this undermines a person's ability to achieve long-term savings.

“In markets of abundance, high productivity and high competition, it will be very difficult to accumulate valuable wealth outside of Bitcoin.”

Fortunately, “we found the trap,” Burnett said, “taking us to an economic singularity where most of the wealth is in bitcoin.”


“Your wealth is melting.”

Sharing research findings on the value of a variety of traditional assets, including fiat currencies, stocks, gold and real estate, Unchained explains that all of their prices are vulnerable to an increase in supply from time to time.

For example, holding the US dollar and other fiat currencies, the study found that over time the currencies depreciate relative to basic consumer goods.

The report says these funds are designed to decline in goods and services that can be produced quickly and cheaply, including shelter, food and energy.

In the last 5 years, the US dollar has depreciated by 92.8%.

The US dollar was getting weaker and weaker. Source: Chainless

Burnett said more and more people are realizing that “money designed to depreciate on basic consumer goods is not a great savings vehicle,” so they're trying to hold their savings in other assets like stocks, precious metals like gold and silver, and real estate. .

According to the findings, which are also “melting,” the 20-year Treasury bond exchange-traded fund (ETF) has fallen more than 94.8% over the past five years. Equity investors face various risks from intense competition and equity dilution (issuance of additional shares).

“As markets become more efficient and competition becomes more intense, excess profits (alpha) eventually tend to zero relative to the market price.”

Using the S&P 500 as an example, this index “has fallen 87.6 percent over the past 5 years,” the study found.

Burnett observed that even gold and silver were not immune to the effects of increased productivity and competition.

The findings show that annual gold production, which was less than 100 tons in the 19th century, rose to more than 1,000 tons in the 1950s. Advances in mining and processing technology have made this gold extraction easier and more efficient, which has contributed to the gradual increase in production, which currently exceeds 2,800 tons per year.

“There is no limit to the potential supply of gold, and as humans become more efficient at mining and extracting gold, gold holders' savings are constantly devalued.”

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Annual gold production. Source: Chainless

Bitcoin – the new economic reality

The findings echoed Burnett's view, when he argued earlier that by 2024 bitcoin is one of the most immutable financial instruments due to its “immutable absolute scarcity.”

In the report, he showed Bitcoin's “superior financial assets” compared to other asset classes, saying that “it is not only reasonable but prudent to visualize traditional wealth stores when weighed in this superior asset.”

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Financial characteristics of various assets. Source: Chainless

Immutable scarcity is an integral part of Bitcoin's value proposition as a savings tool. This feature will be even more important after the next Bitcoin halving, which is just a few days away. This halving is expected to reduce the amount spent per mine from 6.25 BTC to 3.125 BTC.

Famous Bitcoin bull and activist Michael Saylor believes that BTC will outperform other asset classes.

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Source: Michael Saylor

Burnett concludes that the discovery of Bitcoin 15 years ago as a novel tool of savings, trade and economic calculation created a new economic reality that should be ignored.

If you ignore it and keep saving inferior assets at high prices, your economic competitors will catch up and outstrip you.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.

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