by Michael Krapovicky | photography by Jennifer Grace –
Many in the LA community are looking into strengthening their portfolios for security moving forward in their lives. There may be questions about cryptocurrency and its potential. Jeffrey Truchon, founder of Sovereign Wealth Management, an Independent Fiduciary headquartered in Augusta, recommends researching Bitcoin to anyone interested about its benefits.
Managing digital wealth
Sovereign Wealth Management has extensive experience investing in cryptocurrency and offering advice to novice investors. They began studying Bitcoin in 2021 as a result of the COVID-19 pandemic and the monetary environment that followed.
“We began educating and investing our clients in Bitcoin-related positions in January of 2023 and continue to do so today,” relates Truchon. “I believe we, and in turn our clients, are far ahead of the curve and well positioned for the future.”
Truchon delineates Bitcoin and the broader cryptocurrency market to eliminate some confusion about digital monetary systems.
“There are over 20,000 cryptocurrencies, but there is only one Bitcoin,” Truchon reports. “Bitcoin is incredibly attractive as an inflation-resistant long-term store of value.”
Bitcoin, as recognized by the SEC, CFTC, and other regulatory agencies, is a digital commodity, similar to a physical commodity like gold. A commodity is defined as an asset without an issuer, and both Bitcoin and gold fit this bill. According to Truchon, Bitcoin isn’t just scarce; it’s absolutely finite.
“While you can always dig more gold out of the ground, there will never be more than 21,000,000 Bitcoin,” Truchon asserts. “Bitcoin is the only asset in human history where the supply cannot be altered based on demand.”
“Other crypto-assets are somewhere between a digital token, a digital security, and a digital currency, all of which are awaiting further regulatory clarity,” Truchon relates. “A majority of the thousands of other crypto projects have a team of founders, a pre-mined supply of tokens, or incomplete blockchains, all of which add additional risks to the projects and would generally require them to register as ‘digital securities’.”
Combating Crisis
Truchon espouses confidence in Bitcoin over all other forms of financial investment. Truchon directs the consumer to investigate why, at the height of the Great Financial Crisis in 2008, Bitcoin was created, and the problems that it was designed to solve.
“The dollar, in terms of its purchasing power, is simply a melting ice cube over a long period of time,” says Truchon. “We trade our precious time and energy on this planet working forty hours a week in exchange for a currency unit, dollars, that can be created out of thin air. That’s the whole reason we invest, to “sell dollars” and buy assets that are more scarce and desirable with the expectation that they will hold and/or increase in value over the long term.”
One can purchase Bitcoin in fractions. Similar to how one dollar contains one hundred pennies, one Bitcoin contains 100,000,000 Satoshis, or Sats.
“Bitcoin trades 24/7 all around the world and is desired by everyone on the planet looking to store their wealth in an asset that no one can print more of,” claims Truchon. “In my opinion, this makes Bitcoin the greatest long-term store of value asset that the world has ever seen.”
Digital Property
“Due to its digital nature, Bitcoin is more transferable, portable, easier to store, and harder to confiscate than gold,” maintains Truchon. “Many people also use real estate as a store of value. However, real estate is subject to property taxes, insurance costs, maintenance costs, and weather risk. Real estate is also only in demand by those who desire to live in your area, whereas Bitcoin has none of these flaws.”
Bitcoin has unique characteristics that set it apart from most other traditional assets, particularly as society progresses to and through the 21st-century digital economy.
“A lot of people say they won’t invest in Bitcoin because “they can’t touch it,” which is interesting given how technology has continued to dematerialize physical objects – from snail mail to email, in-person relationships to social media, libraries to Google (and now AI), movies and music to streaming, the list goes on,” says Truchon. “Bitcoin is simply the digital version of a pristine store of value asset.”
Bitcoin can also be used as a peer-to-peer payment system.
“Some call Bitcoin “permission-less money” because you can easily transact between two entities without a third-party intermediary (such as a bank) deciding what you can and cannot do,” states Truchon. “It is a life-saving technology in more ways than one, and I believe we’re just scratching the surface of its true potential.”
Learning More
Truchon advises caution and restraint for a significant period and the need to research the areas in which one seeks to invest. A great way to manage market volatility, according to Truchon, is to manage position size, making sure your allocation to Bitcoin—and crypto in general—make sense for your personal risk tolerance and time horizon.
“You need to have a deep understanding of and conviction in what you own in order to reap the rewards that come with holding Bitcoin over the long term,” says Truchon. “I believe you need to have a minimum of a five-year time horizon and ideally, greater than 10 years. If you combine your conviction through understanding with a long investment time horizon, I believe Bitcoin will continue to be the winner.”
Research Sources
To understand what makes this asset special, Truchon reiterates doing independent research. The best way to learn about Bitcoin and other cryptocurrencies is to seek out quality content from recognized sources.
“There is plenty of high-signal content out there for those with an open mind, an ability to think critically, and a willingness to learn,” advises Truchon. “Books such as “The Bitcoin Standard” by Saifedean Ammous, “Broken Money” by Lyn Alden, or “Gradually Then Suddenly” by Parker Lewis, and listening to podcasts or Youtube videos by the likes of Michael Saylor, Jack Mallers, or Preston Pysh are a great way to start.”
Sovereign Wealth Management | Augusta
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Michael is a freelance writer and musician from Auburn. He graduated from the University of Maine at Presque Isle in 1999 with a Bachelor of Fine Arts.
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He has submitted stories and articles for various publications, and performs throughout New England as a solo guitarist and bassist. Michael enjoys traveling, hiking, and spending leisure time with family and friends.