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Home / Bitcoin Guide / Save bitcoin, instead of fiat currency or Gold

Save bitcoin, instead of fiat currency or Gold

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With everything going on around Nigeria’s economy, the rise in inflation rate, which is now about 13.7% compared to about 8% which was the inflation rate about this time last year. The fall in the price of crude oil to about $49.10, which happens to be the major source of revenue for the country and with pipeline vandalization, destruction of oil and gas facilities in the Niger Delta region which have caused the country huge revenue losses and preventing the country from meeting its daily crude production target .

The federal government has made a decision, in asking oil marketers to resume fuel importation to ease the burden on NNPC and end persistent queues at the filling stations. As part of the agreement, the marketers were asked to source forex from the secondary market and are allowed to price imported products accordingly. This had sent the parallel market into a frenzy, with the naira selling for as high as N360. This has given rise to three different exchange rates from dollar to naira. While the CBN officially fixes the dollar at N197, the interbank sells at N285 and the black market goes for N346.

It becomes very disturbing to keep fortune and wealth in Naira, as you do not know the next stop for the nose diving value it assumes at the forex market. A lot of people are therefore turning to gold as a means of storing their wealth and fortune.

However there is a more way of keeping your wealth or investment from the effect of Naira worth in the international market, hear what few investors have to say,

Kanishka Sukumar, a consultant who works in midtown Manhattan, says his parents often stash money in gold for safekeeping. But the 24-year-old thinks there is a better place for his savings. “In times of financial turmoil, I would prefer to see a portfolio full of bitcoin,” said Mr. Sukumar, who holds about one-third of his wealth in the digital currency.

“It’s an ‘I-don’t-trust-people’ purchase,” said Michael Novogratz, a bitcoin owner and hedge-fund manager who left Fortress Investment Group LP last fall. He thinks bitcoin can attract some of those people who would otherwise turn to gold. While Mr. Novogratz said he has a “significant” holding in bitcoin, he owns only one ounce of gold, which, he added, was a gift.

Murat Akdeniz, a 25-year-old business student at Cornell University, said his daily bitcoin trading activity has declined with bitcoin’s volatility. Now it makes more sense to buy and hold the currency, of which he owns about 10 coins, he said.Bitcoin’s increasing acceptance also reflects his generation’s growing trust of technology over governments, said Mr. Akdeniz. “If China decides to sell their gold reserves, my bitcoin price won’t be affected negatively,” he added.

Some investors cited economic uncertainty as another reason to hold bitcoin, especially as recession fears have roiled markets and central banks around the world have cut interest rates into negative territory.

Bitcoin has become “a store of value for those concerned about other asset classes,” said Gil Luria, head of technology research at Wedbush Securities. “Gold used to be the only refuge for those who have grave concerns over the global economy and monetary system.”

Bitcoin is gaining traction with modern-day gold bugs who question the stability of paper currencies or worry about protecting their savings during the next financial crisis.

A recent survey of 3,500 bitcoin users found that one in five hold the cryptocurrency because they don’t want banks or the government “controlling my money,” according to data provider CoinDesk. That was the second-biggest reason for holding bitcoin, behind owning it as an investment.bitcoin

Since its inception seven years ago, bitcoin has shared an appeal similar to gold’s for those who want to hold their money outside of central authority. But as its dramatic price swings have eased, bitcoin has started to look like a more viable store of wealth to some of its fans.

Gold is often viewed as a haven, with many investors trusting it to hold its value better than paper currencies. During the Greek crisis last summer, investors looking for safety flooded into both gold and bitcoin, traders and bitcoin exchange firms said.

“I like [bitcoin] as a hedge against an economic collapse,” Brian Estes, a 48-year-old venture capitalist in St. Louis, said. Holding the digital currency, he added, is like having a “hedge against the ATMs and the banking systems not being functional for a while.”

Murray Stahl, chief investment officer of Horizon Kinetics, which manages $6 billion in assets, said as bitcoin becomes more established, he plans to buy more cryptocurrencies in place of gold.

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