Bitstack allows you to save in bitcoin in a responsible way. But why in bitcoin? Is it a good idea to build wealth in this cryptocurrency?
Over the years, bitcoin has established itself as an essential asset in an investment portfolio. It mainly has three advantages that justify its use as savings, and which we are going to study in this article:
its monetary issuance is predictable and disinflationary;
the payment system cannot be manipulated;
Bitcoin provides absolute private property.
21 million bitcoins, not one more
One of the characteristics of Bitcoin is that the regime for issuing its currency, Bitcoin, is predictable and disinflationary. In other words, the monetary emission on Bitcoin is degressive. There are fewer and fewer bitcoins created over time. The consensus ensures that the limit to this emission is set at 21 million units in total.
Monetary policy on Bitcoin is therefore the opposite of that of state currencies (so-called “fiat money”), whose emission regime is unpredictable and inflationary. Unlike these state currencies for which the quantity of units in circulation is unlimited, the Bitcoin protocol specifies that there will be no more than 21 million bitcoins available. This monetary characteristic naturally encourages more and more people to use it as a currency, since it naturally inspires confidence in the population.
In the euro system, the quantity of money issued is unilaterally decreed by unelected entities. However, a series of financial crises and the recent economic crisis have revealed a major flaw in our current financial system: it is based on trust.
”The fundamental problem with conventional money is how much confidence is needed to make it work. You have to trust the central bank not to depreciate the currency, but the history of fiat currencies is full of breaches of that trust. Banks should be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”
For several decades, we have pursued a policy of infinite economic growth by creating debt. Since there is no limit to the quantity of money that can be printed, and since its production cost is almost zero, the easiest way is chosen. But where will the money come from to finance these deficits? It will certainly come from the central banks, which will buy the debt generated with freshly printed money. The risk is that this threatens the viability of fiat currencies as stores of value. Indeed, the creation of new dollars or euros by central banks is gradually diluting savers' purchasing power. The choice of the easy way often leads these decision-makers to make the money printing work, and therefore to devalue the value of each unit by dilution.
In the Bitcoin system, protocol rules are maintained by consensus. This means that the 21 million limit will be there as long as the economic majority of users decide to maintain it.
The Bitcoin network has been operating for 16 years. Those who knew how to seize this improbable opportunity in the early 2010s saw their investments explode. But today, in 2025, is it still interesting to invest in Bitcoin only from a financial point of view?
Bitcoin is the best performing asset of the 2010s. However, with its development as a means of payment and the arrival of large entities on the market, its appreciation tends to subside over time. However, if we look at its average performance from 2015 to 2020, it still recorded an average of 111% increase per year.
Bitcoin is increasingly behaving like a hard currency like gold. If we overlook its strong short-term variations, we can observe that it appreciates slowly from year to year.
“Bitcoin is not a system for getting rich quick, it is a system for not getting poor slowly.”
In addition, it is interesting to study the Sharpe ratio of bitcoin. This indicator makes it possible to measure the return/risk ratio of an asset. According to Fidelity Digital Assets, in their book Bitcoin Investment Thesis, a financial portfolio with 3% bitcoin from 2015 to 2020 would have had a Sharpe ratio 34% higher than the same wallet without bitcoin. In this same study, we discovered that the wallet with bitcoin was less volatile than the same one without bitcoin. In the past, a portfolio with a small portion of bitcoin has therefore been more efficient and less volatile than a more traditional investment portfolio.
In asset management, it's not just profitability that counts. Diversification is also an important consideration. Although in the short term, Bitcoin is sometimes correlated with gold or the stock market, in the long term, it is frankly uncorrelated from most other asset classes. Still according to Fidelity Digital Assets, we can observe a correlation close to zero between bitcoin and other asset categories from 2015 to 2020:
0.15 with the U.S. equity market
0.14 with the Small Cap U.S. Market
0.05 with the bond market.
0.11 with the real estate market.
0.11 with gold.
0.10 with emerging markets.
Bitcoin is therefore essential in a strategy to diversify its assets.
Finally, if we look at past data, investing in Bitcoin seems to be the most interesting over the long term. This is why recurring and automatic savings in DCA (Dollar Cost Averaging), as proposed by Bitstack, is a particularly coherent strategy. This method makes it possible to smooth out your average purchase price in order to limit the impact of price volatility on your assets.
Obviously, past performances cannot in any way prejudge future performances.
Bitcoin is a non-manipulable system
Unlike the various state currencies, bitcoin is a hard currency, which is particularly interesting for use as a store of value. However, this function is not a feature set in stone. For bitcoin to maintain its value, it is necessary that, in the face of inelastic supply, sufficient demand can be observed.
Finally, for a property to maintain its value and be an attractive savings product, two variables must be controlled: supply and demand. By definition, demand cannot be guaranteed. On the other hand, in the case of Bitcoin, the supply is completely inflexible and cannot adapt to a rise in demand.
This inflexibility of supply is also one of the characteristics that differentiates bitcoin from gold. While gold is often described as a rare asset, its supply is not inflexible in the face of increased demand. Indeed, when the demand for gold increases, the profitability of its extraction also increases. Producers are therefore naturally encouraged to increase the supply, which mechanically rebalances the price of the asset.
A state currency can therefore devalue under the yoke of two phenomena: the increase in its issuance, decided unilaterally by certain decision-makers, or the fall in demand. Bitcoin, on the other hand, can only devalue if demand falls. We then blocked one of the two variables determining the value of the asset, which certainly makes it a better long-term savings product.
Moreover, the banking system is based on debt, and is naturally tending towards collapse. With Bitcoin, you can keep value outside of it.
Absolute private ownership of your savings
For the majority of other assets that can be used as a means of savings, ownership is insured by a trusted third party who will make a link between the identity of the legitimate owner and his assets. In the case of Bitcoin, ownership is embodied by cryptographic key pairs. If you are in possession of your keys, you are literally in possession of your bitcoins. Nobody is in a position to seize or steal them without having access to this information. Thus, private ownership of Bitcoin is not directly ensured by force or law, but by the knowledge of information.
Possession of an object is always ensured by some form of violence, legitimate or illegitimate. For example, in a state-owned society, you own your home because the state can use legitimate violence to enforce its ownership. In a society without a state, only force can ensure the ownership of an object.
For an asset not to be subject to this need for force to insure its ownership, it must be nothing but information. However, any information can in theory be duplicated, making it normally impossible to value it. Bitcoins, on the other hand, are embodied by the knowledge of information, and the nodes of the network prevent them from being duplicated.
A Bitcoin node is a computer that runs the Bitcoin protocol and stores blockchain data. Each node is a member of the Bitcoin network and theoretically represents a user of the system. Its role is to verify, store, and distribute transactions and blocks.
In reality, the force required to enforce bitcoin ownership is not completely annihilated, but it is distributed to each node in the network, i.e. to all users. Indeed, nodes are the materialization of the Bitcoin network, and each one is owned by an individual. All of these users are naturally encouraged to remain honest, or else they will lose ownership of their funds themselves by being removed from the system. When considering the current distribution of the Bitcoin network, one can overlook the need for this force, and admit that bitcoin ownership is only embodied by the knowledge of a key.
Beyond the value of the asset itself, bitcoins are therefore elusive. If you also have a way to access the Bitcoin network (a node), then your transactions with these funds are also incensurable. The incensurability and the elusiveness of bitcoins can be interesting characteristics in order to diversify one's wealth. With a reasonable portion of bitcoin in your wallet, you can easily protect yourself against the various systemic risks that exist.
That's why some bitcoiners like to say that their bitcoins are the only thing they actually own. If their security strategy is well thought out, they know that even in the event of any disaster, they will never lose the enjoyment of their funds.
Bitcoin has three main characteristics that justify its use as savings: its issuance is consensually limited, its system cannot be manipulated and its ownership does not depend on a third party.
Within a portfolio, bitcoin plays an essential role in diversification. First of all, it allows financial diversification, since its price changes independently of other markets. But it also allows for diversification of ownership, because it is an asset whose possession is embodied in the knowledge of information, regardless of the monopoly of legitimate violence.
