Will my Bitcoin grow in my wallet?
It could but it highly depends on how you few that growth. In this article, we answer the question “will my Bitcoin grow in my wallet?”. We go over how BTC gains value and how it can increase by just holding it. So let’s dive right in. But remember that nothing here is financial advice.
To start yes, Bitcoin will grow in your wallet over time. But maybe not in the way you think it will. The way Bitcoin is constructed it will always gain value over time against an inflationary fiat currency.
This means that your BTC should grow when measured against a fiat currency over time. So this will not happen in a day or a year. As you might have seen, Bitcoin can be super volatile. So it goes down as well at times. But the general trend should mathematically always go up. If you look at it from this point of view. BTC will grow from just sitting in your wallet.
However, if you look at it from a pure crypto perspective it might not grow or shrink at all. Because the one BTC you bought yesterday will still be the exact same 1 BTC 10 years from now. Meaning that measured in BTC there is no value change.
Why is this important?
Well, as Bitcoin does not inflate against its original 21 million points. Its real value should only be defined against its own stake in the network (1 of the 21 million). This will never change and thus makes 1 BTC stagnant in value. If you would then want to gain value on your BTC, you would have to find a way to earn more BTC with your current holding.
How does cryptocurrency gain value?
When we look at the value of a cryptocurrency compared to a fiat currency like the dollar or euro. We will always look at the individual trading price and the whole market cap. Cryptocurrencies can simply gain value when more people buy into them. By selling their fiat for crypto.
Reasons why people do this vary and we won’t go deep into that for now. But as people always trade back and forward the price constantly changes with the demand for crypto. Many cryptos have their own use case which gives them value and drives their demand. But with Bitcoin (and some others) it is very simple. The (Bitcoin) currency does not have inflation. So its demand as of now mostly comes from the fact that people buy it to not lose their value against inflation. Which happens a lot in almost all fiat currencies around the world.
Besides as a store of value Bitcoins, demand also comes from some other use cases including as a payment network and computational layers build on top of it. Although this works already great with Bitcoin’s lightning network and layer 2’s that allow for Bitcoin Defi. It seems that the main purpose of BTC at the moment is to fight inflation.
Do you need a non-custodial wallet to earn interest?
No, not really. There are many ways to earn interest on your Bitcoin. From centralized to non-custodial ways. Or by bridging BTC to another blockchain to use it in DeFi Dapps there.
If you want to increase the value of your BTC in BTC. You could lend out your BTC in several ways. Whether the purpose of the loan there seems to be enough demand for BTC to earn you some nice interest on it. One way to do so is by sending it to a centralized platform like NEXO. Here you get paid out daily in either BTC or NEXO tokens.
If you prefer to not keep your Bitcoin with a central entity. You could also use it on the Stacks sidechain. Here you can use a large variety of Defi protocols that let you earn interest on your Bitcoin. But if you do not find enough DeFi Dapps or liquidity there you can always bridge Bitcoin to another blockchain. If you use the Ren Bridge for example. You can have RenBTC on Ehtereum and use it across all Ethereum DeFi Dapps.
Crypto store of value
Cryptocurrencies get much of their value from the store of value perspective. This is understandable with the high level of inflation going on around the world. Even a not project with not that much traffic but no inflation is a better hedge than just holding dollars without receiving any interest. But with blockchains like Bitcoin that are basically indestructible, you could simply enjoy the store of value aspect at no cost.
As the world spirals more and more towards a higher level of inflation as a norm. The number of people that flee into cryptocurrencies like Bitcoin will most likely increase. This will surely push the price up. But you can not guarantee that. Even tho Bitcoin works as an inflation hedge.
If you hold Bitcoin and you want to really let it gain in value. You could simply hold and wait. But earning interest with platforms like NEXO would also increase your stack. Doing both at the same time could put you on top.
We hope to have answered your question with this blog. And that you are now prepared and educated enough to get the full potential out of Bitcoin as a global store of value. In case you have any other questions you would like us to answer. Just reach out to us on our socials. And do not forget to follow us on Twitter, Telegram, and all the other places.