Vailshare Capital Founder and CEO Dr. Jeff Ross Now argues that the reason people hold and invest in bitcoin is not because they are diversifying. In a post on X, Ross explained that the goal is that the majority want to preserve and gradually increase their purchasing power, not spread risk.
bitcoin is to preserve purchasing power
The CEO's perspective directly contradicts the conventional wisdom often held by financial advisors. Most recommend diversification, including into store-of-value assets like gold, as a key strategy to mitigate risk.
In contrast, Ross says traditional assets like bonds, while offering diversification, can be susceptible to inflation risks, which could impact purchasing power in the long term.
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Ross answered to Robin Crooks, former chief currency strategist at Goldman Sachs, who diluted bitcoin's recent rally. According to Crooks, btc is rising due to market adjustments. This shift, boosting btc and other safe havens, comes as the US Federal Reserve (Fed) prepares to change monetary policy, possibly cutting rates in March.
It is this expectation, Crooks adds, that explains why bitcoin is recovering. The analyst went against the grain and claimed that the currency is not recovering because it has a “diversification” benefit due to its store of value property. bitcoin holders often cite the currency's deflationary nature and how it can protect against devaluation of traditional assets as an advantage.
Still, and despite the volatility, Ross took issue with Crooks' preview, pointing to btc's historical performance and how it has managed to “preserve and increase purchasing power.”
Despite bitcoin's stellar performance over the years, critics remain unconvinced, arguing that its volatile nature and lack of intrinsic value make it speculative. Even reinforcing this opinion, Crooks, who has been dismissive of bitcoin in the past, added that the currency is a “bubble.”
Early last year, former Goldman Sachs analyst saying bitcoin “explodes” when the Federal Reserve adjusts its policies and has no “store of value” function.
btc Bullish Trends Continue Before Halving
The world's most valuable currency has been on an upward trend since early 2024. One of the reasons the community is bullish is that the US Stock Exchange (SEC) approved exchange-traded funds (ETFs). of bitcoin spot. Through this product, investors have been doubling down on the asset, raising bids and subsequently taking the currency to new highs.
At the same time, the network will adjust the number of coins distributed to miners as block rewards starting in early April. Then the rewards will be halved from 6.25 btc.
The expected emissions reduction, as a guide to historical performance, could lead to further gains in the second half of 2024. The halving will likely make bitcoin an attractive asset as a hedge against inflation, making it an ideal store of value asset .
Featured image from Canva, TradingView chart
