In today’s ever-changing economy – with endless expansions of the money supply – family offices have an option to hold a form of money that can’t be inflated: bitcoin. After 11 years of its existence, bitcoin has gone from a fringe to a mainstream concept. With the likes of the CEO of Twitter, Jack Dorsey, and billionaire hedge fund manager Paul Tudor Jones leading the way, bitcoin is increasingly being bought by billionaires, large corporations, and family offices. From a private wealth perspective, there are many synergies between family offices and bitcoin. As family offices aim for long-term wealth preservation, bitcoin aims to retain value over time.
But, in order to fully understand why it makes sense to buy bitcoin, it is important to acknowledge the current challenges and limitations of our existing model: fiat currency, typically defined as government-mandated money that has nothing of value backing its worth.
A history of monopoly
Throughout history, there has quite literally been a monopoly on money that central banks and governments have had. Bitcoin changes this paradigm, and it is humanity’s first real-world competitor to this monopoly. Like any other product or service, if one single entity has total control over the market, as a result of the lack of competition, the consumer/user will have a low-quality product that will not last through time.