The Power of Being Long on Bitcoin: Beyond the Halving

Bitcoin (BTC) has recently undergone its fourth halving, and investors are eager to see its impact on the market. The true value of BTC lies in its unique “monetary properties,” according to Joe Burnett, a researcher at Unchained, a Bitcoin financial services company. In his recent research findings, Burnett argues that Bitcoin is the ultimate savings tool that can protect individuals’ wealth from the inevitable decay of the free market. He believes that Bitcoin is an exceptional asset that allows for the transfer of wealth over time without any loss.

Burnett explains that Bitcoin’s supply schedule cannot be altered by any government, company, or group of people. If anyone attempts to change the rules, they would simply create a new network through a fork. Bitcoin is regarded as the best form of money because it possesses the most superior monetary properties, including portability, durability, divisibility, and fungibility. Bitcoin has a scarcity limit that is highly credible. The halving event serves as another confirmation of Bitcoin’s predictable, immutable, and transparent monetary policy.

Unchained specializes in offering financial services for long-term Bitcoin holders. Burnett advises against holding Bitcoin for short periods of time and suggests allocating capital for long-term savings. By doing so, investors can ignore short-term volatility and focus on the potential long-term capital appreciation.

Interestingly, this is the first time Bitcoin has reached an all-time high before a halving event. Burnett speculates that Bitcoin exchange-traded funds (ETFs) likely played a crucial role in the price increase before the halving. He predicts that the approximately 18 months following the halving will also be positive. Burnett believes that the recent decline in Bitcoin’s price is due to the overall market downturn, including the drop in the S&P 500. Bitcoin’s value acts as a gauge for global liquidity. When macro conditions tighten, Bitcoin suffers, but it benefits when conditions ease. In the long run, as more dollars are created, Bitcoin remains the fastest-growing asset.

Burnett emphasizes the risks associated with storing wealth outside of Bitcoin. Any form of wealth stored outside Bitcoin can be devalued or debased over time. If the world holds a significant amount of wealth in gold or real estate, entrepreneurs will find ways to increase their supply. Bitcoin, Does not melt or decay, regardless of the amount of wealth stored in it. Until now, humanity has not had a suitable asset to preserve wealth over time without any leakage.

For individuals and businesses considering saving Bitcoin in their treasury, Burnett advises that Bitcoin should be seen as a long-term investment rather than a get-rich-quick scheme. Investors should be prepared for extreme volatility and hold Bitcoin for multiple years. To ensure the utmost security, collaborative custody is recommended. Holding Bitcoin through collaborative custody eliminates the risk of a single point of failure, preventing the loss of coins. Unchained, according to Burnett, fulfills this need for secure custody of Bitcoin and resolves the issue of trust in institutions like Mt. Gox, FTX, Coinbase, or BlackRock.