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Cryptocurrency Investing: Why Bitcoin Is Leading the Way

December 20, 2024

You’ve likely noticed the recent attention on crypto investing, with leaders in the industry like Bitcoin in the spotlight. Bitcoin’s value has surged over the past few months, and it seems to be the star of many investment conversations these days.


Cryptocurrency has grown into a significant force in today’s financial world. As digital money powered by blockchain technology, it’s eliminated the need for banks or middlemen, making transactions faster, more transparent, and accessible. 


Of the many cryptocurrencies available in the market, Bitcoin is the original. It’s become more than a buzzword—it’s reshaped the way we think about money and investing. Whether you’re already a believer or just Bitcoin-curious, the year 2024 has been an exciting chapter in its story.


Understanding Bitcoin and Cryptocurrency Investing


Bitcoin is often called “digital gold” in the cryptocurrency world, and it’s consistently maintained its position as the most valuable, secure, and widely recognized cryptocurrency. Many investors consider it as not just another digital currency, but the cryptocurrency.


What makes Bitcoin so special?


Bitcoin has a fixed supply of 21 million coins, built into its code. This limited supply makes the cryptocurrency similar to precious metals like gold—it’s rare and can’t be replicated, and this scarcity drives its value. While central banks can print traditional currencies to increase the money supply (which can lead to inflation), the cap on the amount of Bitcoin in circulation helps the cryptocurrency hold its value and act as a potential hedge against inflation.


Traditional financial systems rely on banks or intermediaries for their transactions, which often results in high fees, slow transaction times, and vulnerability to economic crises. Bitcoin instead operates on blockchain technology: an online, open ledger system that ensures every transaction is secure, transparent, and verifiable. This decentralized blockchain network protects Bitcoin from disruptions or failures that can affect traditional currencies or financial institutions. 


By cutting out the middleman, Bitcoin transactions can be sent directly between parties, anywhere in the world, in minutes. There’s no need for a bank to approve or process the transaction, and fees are often a fraction of what traditional financial institutions charge.


Because Bitcoin operates independently of traditional markets, it’s an asset that doesn’t directly correlate with stocks, bonds, or government-issued currencies. For an investor, Bitcoin offers the ability to diversify your portfolio and reduce exposure to market volatility.


Bitcoin Trends This Year


Bitcoin’s recent values have hit record highs, with a price up nearly 150% from last year. Its performance in 2024 has been prompted by several factors:


  • Political and Macroeconomic Impact

Political and economic uncertainty can drive market volatility, prompting investors to invest in alternative assets to help reduce risk in their portfolios.


This year’s persistent inflation, global market turbulence, and geopolitical tensions increased Bitcoin’s appeal and drove its value up due to its independence from central banks and political systems. After the U.S. Presidential election, Bitcoin’s prices surged even higher, as investors saw it as a hedge against potential instability during a political transition.


  • Increased Investor Adoption

Several Bitcoin ETFs were launched this year, providing a more straightforward way to invest in Bitcoin. Also, the introduction of clearer cryptocurrency regulations regarding the use, taxation, and trading of digital assets helped create a more secure foundation for institutional investment in Bitcoin as a strategic diversification tool. 


The increased investment from traditional investors and institutional investors, such as asset managers, hedge funds, and corporations, helped with price stability during market corrections and demonstrated a growing confidence in Bitcoin’s long-term investment potential. 


  • Technological Innovation

Bitcoin’s Lightning Network (a payment protocol built on Bitcoin’s blockchain) continued to expand and helped to improve Bitcoin’s scalability, by enabling faster and more cost-effective transactions. These network upgrades helped boost Bitcoin’s functionality for everyday use as a practical payment method.


This year also brought further innovations in blockchain technology and advancements in more energy-efficient mining techniques to address concerns about Bitcoin’s energy-intensive mining process. These developments helped to not only reduce Bitcoin’s carbon footprint and environmental impact but strengthened confidence in the cryptocurrency as well. 


Investment Opportunities in Bitcoin


If you’re considering investing in Bitcoin for its long-term store of value, or its benefits in diversification, there are several ways you can incorporate Bitcoin into your portfolio:


  • Direct Bitcoin Investment:
    The most straightforward way to invest in Bitcoin is directly purchasing the cryptocurrency. You can buy Bitcoin and hold it long-term as part of your investment strategy. This "buy and hold" approach can be appealing if you’re seeking exposure to Bitcoin’s price appreciation, with the potential for significant returns as demand increases.
  • Bitcoin Exchange-Traded Funds (ETFs)
    If you’re looking to gain exposure to Bitcoin without directly purchasing it, Bitcoin exchange-traded funds (ETFs) provide a simpler alternative. Bitcoin ETFs allow you to buy shares in funds that track Bitcoin’s price movements, and function similarly to any other stock or index fund. Bitcoin ETFs also offer the benefit of being regulated, which provides a layer of security and transparency.
  • Bitcoin Derivatives
    Bitcoin futures, options, and other derivatives also offer a way to gain exposure to Bitcoin’s price movements without owning the digital asset directly. Futures contracts allow investors to speculate on the future price of Bitcoin, which can lead to substantial profits if their predictions are correct, while other derivatives like options and swaps allow for more complex strategies. Derivatives are more advanced investment vehicles that have higher risks, making them best suited for those who have a strong understanding of the cryptocurrency market.


Navigate Bitcoin With Confidence


As Bitcoin continues to evolve and disrupt traditional financial markets, more investors are including it in their portfolios. When you incorporate Bitcoin as part of a diversified mix in your investment portfolio, you can help reduce overall risk and potentially improve your long-term returns, especially in times of market volatility or economic uncertainty.


The cryptocurrency market can be complicated, and it may be helpful to work with a financial advisor. They can help determine the appropriate role Bitcoin should play in your portfolio, and make sure that it fits within your risk tolerance and investment strategy. A financial advisor can also keep you informed about cryptocurrency regulatory and tax considerations. 


At
Five Pine Wealth Management, we specialize in guiding clients through the intricacies of Bitcoin investing with confidence. We can help ensure your Bitcoin investments are well-managed and aligned with your overall financial plan. As fiduciary financial advisors, we always have your best interest in mind as we help you create a long-term strategy to achieve your financial goals. To see how we can help you with investing in Bitcoin or other financial needs, send us an email or give us a call at 877.333.1015 today.

March 28, 2025
Despite always hearing about the aging of America and the baby boomer generation, did you know the millennial generation is actually the largest age group in the country? Born between 1981 and 1996, millennials outnumber baby boomers post-WW2, with about 72.2 million millennials in the United States, as of 2023. The media often highlights millennials' financial challenges: mountainous student loan debt, a competitive job market, unaffordable housing, and credit card debt. There’s no doubt it’s been more challenging for millennials to save and gain a stable financial foothold compared to previous generations. Yet despite these hurdles, millennials have financial opportunities available to them that previous generations did not. Millennials came of age with the rise of the internet and advances in technology; they’re digital natives, incredibly tech-savvy, and well-positioned to master the digital era they live in. Millennials’ unique position in history gives them advantages when it comes to investing, starting a business, and increasing their financial literacy. Millennials and Investing Millennials are changing the game when it comes to investing—innovative financial platforms and investment products have helped to evolve the investment landscape, and have made investing more accessible than ever before. As a millennial, embracing this innovation can help move you closer to achieving your goals and building a financially secure future. Impact Investing Millennials are known for being socially conscious with their spending and supporting brands and companies that align with their values. This desire to make a difference often extends into their investments—intentionally choosing to invest in companies that reflect their values and promote the causes they support. Through impact investing, you can support positive global change while also working toward your financial goals. Impact investing can be done through investing in Environmental, Social, and Governance (ESG) investment funds, or through pursuing a strategy of Socially Responsible Investing (SRI). ESG funds focus on businesses that have strong environmental policies, social impact initiatives, and good governance. These funds have become increasingly popular with investors, like millennials, who want to support companies that prioritize sustainability and ethical practices. SRI focuses on investing in companies that promote environmental sustainability, social justice, and corporate ethics. SRI can also exclude investing in companies that engage in activities that are considered negative or harmful—tobacco, alcohol, fossil fuels, firearms, or the defense industry. Cryptocurrencies and Decentralized Finance Cryptocurrencies are newer investment frontiers that techie millennials can be more comfortable exploring than older generations. Crypto such as Bitcoin and Ethereum are digital currencies that operate on blockchain technology , which provides increased transparency and security. Crypto investments can be risky, but can also offer high rewards. Decentralized Finance (DeFi) platforms also leverage the security and transparency of blockchain technology to offer decentralized financial services and transactions. DeFi platforms provide opportunities for lending and investing without traditional intermediaries like banks and other centralized institutions. For millennials, DeFi represents a cutting-edge way to engage with financial services and they can offer more control and potentially higher returns than traditional methods. The Power of Time One of the biggest advantages millennials have when it comes to investing is time. If you start investing early, you can benefit from compound interest and long-term investments, which can significantly boost your returns and help increase your wealth. Compound interest is the process where the interest you earn on an investment is reinvested, which generates more interest. The longer your money is invested, the more it can grow. Even small, consistent contributions to your investment portfolio can accumulate substantial wealth over time. Having a long-term investment horizon allows you to ride out market volatility, and capitalize on growth over time. By not reacting to short-term market fluctuations, you can achieve more stable returns. Long-term investing is a powerful tool that can help you build a secure financial future. Millennial Entrepreneurship This generation’s core characteristics set them apart as innovators and business creators. As digital natives, millennials have a strong grasp of technology which allows them to leverage digital tools such as social media marketing, e-commerce tools, and data analytic platforms to grow their businesses exponentially. You’ve likely seen peers thrive in their ventures through their use of social media, which has become a critical tool for marketing, brand building, and customer engagement. Community-building is also highly valued among this generation—the use of LinkedIn alone helps entrepreneurs connect with fellow collaborators, business owners, and mentors. Similar to aligning your investments with your values, you can easily integrate your ethical beliefs into your business ventures. Ethical business practices such as developing eco-friendly products, creating an inclusive workplace culture, and advocating for fair trade processes can make a positive impact and build loyal customer bases. Millennials and Financial Literacy The millennial generation has more resources than ever to increase their financial literacy. Free online finance courses are easy to access, readily available, and enable you to educate yourself so that you can make smart financial decisions to help you achieve your goals. Personal finance apps like Mint and YNAB (You Need a Budget) can also increase your financial literacy by helping you understand and manage your finances more effectively. They offer features like budget tracking, expense management, and financial goal setting to help you be in full control of your finances. Finance apps make it easier for you to stay on top of your financial health and make informed decisions in managing your money. Work with Us to Reach Your Goals  Ever-evolving technology has transformed the financial landscape significantly over the last few decades and millennials are more prepared to take advantage of that transformation than any generation before them. While you can take charge of your finances on your own, working with a financial advisor can help you find your path and stay the course of your journey toward financial security. Financial advisors can provide advice that is tailored to your individual circumstances, to better meet your unique needs and objectives. At Five Pine Wealth Management , we’re committed to helping you create a customized financial plan and investment strategy to help you reach your current and future goals. As fiduciary financial advisors, we always act in your best interest in every step we take with you on your financial journey. We also offer virtual financial planning for millennials looking to fit financial planning into their own schedules. To see if we can help you, email us or give us a call at 877.333.1015 today to schedule a meeting.
March 21, 2025
Getting a raise is an exciting moment in your career and financial journey. Maybe you’ve gone through an executive-level position change and received a 10% pay bump or an internal promotion yielded you an additional 15%. Regardless of how you got your raise, you’re now in a unique position to move the needle on your long-term financial goals (and maybe splurge a little, too). But before you pull the trigger on that major purchase you’ve been eyeing, it’s important to have a long-term plan for the extra money in your paychecks. Even a significant raise can erode quickly if you suddenly upgrade your home, start vacationing like a celebrity, or snap up that Mercedes you’ve been eyeing. Below are our top five strategic wealth opportunities for you to consider the next time you receive a raise. First Things First: Understand Your New Numbers A 10% or 20% raise may sound like a huge boost, but not all that money will land in your bank account. Before making any financial moves, it’s important to calculate your new take-home increase after taxes and contributions. For example, if you receive a $25,000 raise on a $175,000 salary, you might expect $2,083 more per month. However, after accounting for federal taxes, state taxes, and other deductions, your actual monthly increase might be closer to $1,500. Knowing your actual take-home pay helps you set realistic expectations and make informed financial decisions. Getting a Raise: 5 New Strategic Wealth Opportunities For high-income earners, getting a raise isn’t just more spending power—it’s an opportunity to build lasting wealth while minimizing taxes. Instead of falling into lifestyle creep, consider these five wealth-building strategies to maximize your higher income. 1. Grow: Maximize Tax-Efficient Investment Opportunities With your increased income, you now have more opportunities to maximize tax-advantaged accounts and investment vehicles. For 2025, you can contribute up to $23,500 to your 401(k), plus an additional $7,500 if you're 50 or older. If you weren't maxing out your contributions before, your raise provides an excellent opportunity to reach these limits. Let's say you direct $750 of your new monthly take-home pay to your 401(k). You not only build retirement savings but could save approximately $2,160 in federal taxes annually if you're in the 24% tax bracket. Consider increasing your retirement and investment contributions by the same percentage as your raise. For example, if you receive a 10% raise, aim to increase your contributions by 10% of that raise. This incremental adjustment will help ensure you can maintain the lifestyle you're accustomed to when you retire. 2. Save: Optimize Tax Strategies to Reduce Liabilities A higher income often means entering new tax brackets, making tax efficiency more crucial than ever. Without proper planning, you might find a significant portion of your raise going to Uncle Sam instead of building wealth. Consider switching to a high-deductible health plan (HDHP) for your family, which can lower your premiums while giving you access to a Health Savings Account (HSA). In 2025, you can contribute up to $8,550 for family coverage , potentially saving around $2,000 annually in taxes. Additionally, the money in your HSA grows tax-free and can be withdrawn for qualified medical expenses without tax liability. 3. Diversify: Explore Alternative Investments A higher income can open the door to new investment opportunities, allowing you to diversify beyond traditional stocks and bonds. Alternative investments like real estate investment trusts (REITs) can provide exposure to different asset classes, potentially offering both passive income and long-term appreciation. These types of investments often move independently of the stock market, helping to balance overall portfolio risk. They can also offer lower barriers to entry compared to direct property ownership or other traditional alternatives. The key is to align your investments with your risk tolerance and liquidity needs while taking advantage of opportunities that complement your existing strategy. 4. Strengthen: Build Your Estate With more income comes greater potential for building generational wealth. Investing half of your $25,000 raise annually for 20 years with a 7% return could add over $500,000 to your estate. This makes it essential to have proper structures in place for efficient wealth transfer. To ensure your wealth transfers efficiently, consider: Trusts to protect assets and minimize estate taxes Life insurance strategies for wealth preservation Family-limited partnerships for multi-generational wealth planning These structures become increasingly valuable as your wealth grows. 5. Impact: Upgrade Your Philanthropy & Social Impact There's something powerful about reaching a place in life where you can give back meaningfully. Beyond the personal satisfaction of a higher income, this new chapter brings an opportunity to create lasting positive change in your community and the causes closest to your heart. Maybe you still remember the community college professor who believed in you when you weren't sure about your path. Now, twenty years later, by creating a donor-advised fund (DAF) to support student scholarships, you're not just making education more accessible—you're giving another student their own life-changing mentor. By thoughtfully structuring your charitable giving through vehicles like DAFs or qualified charitable distributions from retirement accounts, you can maximize both the impact of your generosity and the tax benefits that come with it. After all, effective philanthropy isn't just about giving money away—it's about creating meaningful change in the ways that matter most to you. Red Flags: Top Signs of Lifestyle Creep While getting a $25,000 raise provides excellent opportunities for wealth building, it's important to avoid (too much) lifestyle creep. That upgraded car lease might cost an extra $200 monthly, the bigger house another $800 in mortgage payments, and the premium credit card's annual vacation package another $400 monthly in travel costs. Before you know it, your entire raise can get absorbed by new expenses. While there's nothing wrong with enjoying the fruits of your hard work, the key is being intentional about which lifestyle upgrades truly matter to you. Here are some common warning signs that lifestyle creep might be eroding your raise: Your monthly expenses rise automatically with your income You upgrade multiple lifestyle aspects at once (housing, car, travel, dining) Your savings rate remains unchanged despite higher earnings Luxury spending becomes your new normal Your cash reserves aren’t growing despite a higher paycheck Instead of automatically increasing spending across the board, take time to identify the one or two changes that would bring the most joy and fulfillment to your life. Then, invest the rest. Put Your New Money to Work with Five Pine Wealth While these strategies focus on wealth building, don't forget to invest in yourself through continued education, health, and meaningful experiences. The key is finding the right balance between growing your wealth and enjoying the fruits of your success. Whether you've recently received a raise or are anticipating one soon, having a plan in place can help you maximize this opportunity. Our team can help you evaluate which of these strategies would work best for your unique situation and create a customized plan to help you reach your financial goals. At Five Pine Wealth Management , we can help you implement these strategies in a way that aligns with your personal goals and values. To learn more about making the most of your increased income, schedule a meeting with us. Email us at info@fivepinewealth.com or call us at 877.333.1015.  Let's work together to transform your raise into lasting wealth.
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