- Home
- Cryptocurrency For Conservatives
Is Crypto For Republicans And Libertarians?
DISCLAIMER: I’m not a financial advisor and this is not financial advice. Investing involves the risk of loss. You agree that you alone bear all the risk of any financial or investment decision that you choose to make. All content is for informational purposes only.
First, let’s define cryptocurrency in its simplest form: It’s a decentralized digital currency that anyone can send electronically to anyone else anywhere in the world. The term altcoin refers to any cryptocurrency other than bitcoin.
Buying and investing in crypto, as it’s known, is becoming easier and more and more people are doing it. In turn, many of the cryptocurrency coins have increased in value.
It would be foolish for any serious investor to disregard cryptocurrency entirely. But does this new digital currency align with your financial and political views? Let’s go over some reasons it might be appealing to you.
#1 Crypto Is Uncensorable
The United States of America is meant to be a place of free speech. It’s spelled out in the Bill of Rights.
Many countries, including China, do not provide this level of protection.
Have you heard of capital controls before? They’re a means of using money to suppress people.
Cryptocurrency’s decentralization ensures that it cannot be restricted.
The transfer of control and decision-making from a centralized entity (organization, group, banks, governments) to a distributed network is referred to as decentralization. Decentralized networks aim to limit the amount of trust that participants must place in one another and to prevent them from exerting power or control over one another.
Each network participant possesses a duplicate of the exact same data in the form of a distributed ledger. The majority of the network members will reject a member’s ledger if it has been tampered with or corrupted in any way.
Even after China outlawed bitcoin exchanges and mining farms in 2017, the network thrived.
Isn’t it valuable to have a store of value that no one can take away? To me, that is a precious, traditional, conservative belief.
#2 Cryptocurrency Inspires Freedom
Less government “big brother” control and oversight equals more transparency. Freedom and liberty are foundational to conservative beliefs.
Big banks and governments can’t restrict or confiscate your money because of decentralization.
Because transactions cannot be modified, there can be no “fudging the books” or murky business.
Bitcoin’s early users were neither drug dealers nor money launderers. They were thinkers and dreamers. They desired financial freedom.
Satoshi Nakamoto, the Bitcoin creator, did it for a philosophical reason. He mentioned bank bailouts in the code for the first block in the Bitcoin network.
Crypto and bitcoin are trying to bring financial liberty utilizing the transparent and decentralized blockchain. A blockchain is a system in which a record of transactions, or digital ledger, is maintained, duplicated and distributed across an entire network of computers.
#3 Cryptocurrency Is Transparent
The Federal Reserve is less transparent than crypto. Cryptocurrency has two characteristics that no other currency, including the US dollar, has: decentralization and transparency.
This is contradictory to crypto’s transparency. In the fiat currency system, there is no transparency into past transactions, such as where your tax payments go. We don’t even have a clue how much money is being printed.
Meanwhile, the Federal Reserve is constantly printing money, “boosting” the economy. We have no idea what monetary policy will be like in the future. The Federal Reserve cannot be audited.
Simply put, decentralization and transparency are two compelling reasons to consider investing in crypto.
#4 Bitcoin Is And Will Remain Scarce
The scarcity of bitcoin is one of the key reasons for its rise in value.
Only 21 million bitcoins will ever exist. That is a fact that cannot be altered.
You don’t have to be a crypto expert to understand this: as supply goes down, price goes up.
There would only be 0.0023 BTC for each person if the entire bitcoin supply were split evenly among all persons on the planet. You will own more than most individuals will be able to own if you own more than 0.0023.
The market capitalization of gold is $6 trillion. If bitcoin reaches the same total market capitalization as gold ($6 trillion), the bitcoin price will be around $340,000 per coin.
That may sound too fantastic to be real, but keep in mind that bitcoin was once worth less than $1. Bitcoin first started trading from around $0.0008 to $0.08 per coin in July 2010.
#5 Cryptocurrency Has Permanent Rules
Despite the fact that new coins are mined and added to the circulating supply on a regular basis, bitcoin’s supply cap of 21 million coins will never be exceeded.
The rule is open to the public, everyone can see it, and no one can alter it.
How does this concept compare to the fact that every day, governments around the world print more money? It is done in the United States. It’s known as Quantitative Easing. That’s just a fancy way of saying “we’re printing more money because we think we should.” There is no method to make more bitcoin.
Other cryptocurrencies have their own rules but the rules are publicly available.
Yes, you should consider acquiring bitcoin and other crypto if you don’t like governments manipulating your investments.
#6 Buying Crypto Offers Potential Profits
Since its creation in 2009, the price of bitcoin has been growing strongly. The price has climbed from less than $0.01 when it was first released to the present level. It fluctuates, and yes – it’s gone through some crashes. But for the purposes of this conversation, let’s assume it’s approximately $40,000.
At the crest of bitcoin in 2017, a $50 investment in 2009 would have yielded $100 million.
If people who bought at the ‘peak’ of $200 in 2011 and the ‘peak’ of $1400 in 2013 didn’t panic sell, they would still be highly profitable.
After Tesla stated in an SEC filing that it had purchased $1.5 billion worth of Bitcoin, the price of Bitcoin reached a high of over $44,000 in early 2021, giving it a market value of over $800 billion.
It’s only the beginning, according to bitcoin bulls.
“It’s probably going to $100,000, then $150,000, then $200,000,” said Chamath Palihapitiya, founder and CEO of Social Capital. “In what period? I don’t know. [Maybe] five or 10 years, but it’s going there.”
If you own a home and its value decreases, you do not panic and sell your home. You realize that if you hold it, the price will likely rise again. The same may be said about bitcoin.
So, should you put your money into bitcoin? Why not if you plan on making a long-term investment or creating a legacy for your children and grandchildren? Profits are integral to capitalism.
While bitcoin has been used to provide this example, it is only one of thousands of cryptocurrencies available.
#7 Purchasing Cryptocurrency Provides Great Diversification
Crypto is a new asset class.
According to Chris Burniske, a blockchain analyst at ARK Investment Management and co-author of the article “Bitcoin: Ringing the Bell for a New Asset Class”:
“If an investor who holds bonds and equities swapped a percentage of their prior holdings into Bitcoin, because of Bitcoin’s low correlation and superior absolute performance, they could have decreased the volatility of the portfolio while simultaneously increasing absolute returns.”
Another reason to consider investing in cryptocurrency is for diversification. Investing a portion of your portfolio in crypto, either directly or through a Crypto IRA, adds another layer of diversification to your portfolio.
#8 Current Rally Driven By Institutional Investors
“Those publicly known investments of big companies exist in the real world,” James Ledbetter, editor of fintech newsletter FIN and CNBC contributor says. “You can point to them and say, ‘bitcoin is getting more valuable right now.’”
Bitcoin has recently earned support from major investors such as Paul Tudor Jones and Stanley Druckenmiller. Notable financial institutions such as PayPal and Fidelity have also lent their support. Square and MicroStrategy have purchased bitcoin using their balance sheets.
Cryptocurrency Investing For Conservatives
Anthony Pompliano, a bitcoin investor and co-founder of cryptocurrency hedge fund Morgan Creek Digital Assets, believes in holding bitcoin for the long haul. Because bitcoin has a finite supply by design, Pompliano believes that as demand grows, so will the price.
Ledbetter agrees. Bitcoin proponents frequently equate it to gold, stating that it is a hedge against inflation and the US dollar, as well as a buffer against any economic or infrastructure collapse.
“If you think of the structure of every single currency in the world, they’re inflationary and they are controlled by governments,” Pompliano says. “And those governments have very small groups of people who make the decisions as to what happens to that currency.”
Bitcoin is the “greatest protector of purchasing power,” according to Pompliano, since its supply is limited and it is governed by computer code.
Like gold, “there’s no question that bitcoin can be a hedge against inflation, depending on the time frame of when you buy and whether it’s held or sold,” Ledbetter says.
However “You have to at least be mentally prepared and financially prepared that [a crash] could happen again. It could happen tomorrow,” Ledbetter says.
According to Ledbetter “If you look historically at the price of bitcoin, there have been a number of occasions where it’s really spiked and then comes crashing down really quickly.” Bitcoin “is a highly volatile, highly risky investment”
Crypto Investment Strategy For Conservatives
There are so many different strategies for crypto investing that they would require many more articles to address.
So let’s start with this question: If crypto is such a highly volatile, highly risky investment, is there any way to make more traditional, safer investments within crypto? Note that I said safer, NOT safe.
Buy And Hold Crypto For Conservatives
As Ledbetter said you have to be mentally and financially prepared for a crash. Mentally it must be viewed as a long-term investment. Be prepared to hold through all the ups and downs. Make sure it’s money you will have no reason to need for years, or ever, for any reason.
Traditional or Roth Crypto IRA For Republicans
If you want tax advantages at the same time as you buy and hold consider a crypto IRA. These are only recently available so there are very few companies offering them. Check out Regal Assets here.
Earn Higher Interest On Crypto
On average, 3-month CDs (Bank Certificates of Deposit) in early May 1981 paid about 18.3 percent APY, according to data from the St. Louis Federal Reserve. (Of course this came with high inflation too.)
Compare that to current interest rates. I don’t know about you but here’s what I’m currently earning:
Cash in brokerage account: .01%
Cash in bank savings: .1%
Cash in “high-yield” savings: 2.35%
Wow, racking in the dough there! I would wager that you’re feeling the same pain.
Would you even believe me if I told you it was possible to earn high interest rates on your crypto investment?
