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Asset Protection in Brazil: Bitcoin as an Alternative

Sep 14, 2024
  1. Monetary Depreciation and its Consequences
  2. Bitcoin as a Means of Protection
  3. Alternative Options and Diversification

In Brazil, which faces significant monetary devaluation of 13 % per year, protecting one's assets has become a major challenge for investors. As the local currency, the Brazilian real, gradually collapses, the quest for effective solutions to preserve purchasing power intensifies.

Monetary Depreciation and its Consequences

With an average loss of value of 13 % per year, Brazilians see their purchasing power inexorably erode. In this context, assets that surpass this rate of devaluation are rare.

Bitcoin as a Means of Protection

Over the past ten years, Bitcoin has posted an average annual return of 184.96 %, despite periods of significant decline, such as in 2014 (-58.6 %) and 2018 (-72.56 %). These figures, though volatile, show that in the long term, Bitcoin has significantly outperformed other assets.

Alternative Options and Diversification

The Nasdaq is one of the few other assets capable of effectively protecting Brazilians against the loss of value of their currency, with an average annual return of 15.28 %. Diversifying assets and integrating multiple asset classes can offer good protection against economic uncertainty. The question for Brazilian investors will be finding the right balance between high-yield assets like Bitcoin and other more traditional instruments like the Nasdaq or gold.

Monetary depreciation in Brazil is pushing investors to seek solutions off the beaten path. Bitcoin, despite its risks, has established itself as a bulwark against the erosion of the real. However, diversification and balanced investments remain key aspects of asset protection.

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