Strategic Wealth Management for Bitcoin Holders

We are witnessing remarkable advancements on secondary layers within the Bitcoin network. Bitcoin core developers are continually innovating to enhance the scalability and transaction capacity of the network, allowing it to perform a broader range of functions. These developments not only increase Bitcoin’s utility but also have the potential to significantly boost its value.

This blog post summarizes a recent talk our co-founder and executive managing director Matt McClintock shared with the Unchained audience. You can tune into the full video at the bottom of the page.

The Dynamics of Bitcoin Value

Predicting the spot price of Bitcoin in U.S. dollar terms remains a challenging endeavor. However, Michael Saylor’s assertion that “it goes up forever” captures a fundamental belief within the Bitcoin community: as Bitcoin’s network grows and its applications expand, its value is likely to increase. This upward trajectory is compounded by the depreciation of the U.S. dollar, which typically loses value at a rate of 2 to 8 percent per year. As Bitcoin appreciates and the dollar depreciates, the value gap between them continues to widen. This trend suggests that Bitcoin’s long-term value proposition remains robust. For the U.S. to fully leverage this potential, it might need to consider holding Bitcoin as part of its strategic economic reserves.

The Rise of Ideological Investing

Investors, especially the younger generations, are more inclined to align their investments with their personal values and worldviews. This trend is reflected in the growing interest in companies that demonstrate social responsibility, such as having women in the C-suite or implementing sustainable practices. Investors are now willing to prioritize ideological alignment over traditional financial metrics like alpha and beta.

At Bespoke Group, we help our clients uncover the deeper purpose behind their wealth. We explore questions such as: What does this wealth mean to you? How can it be used to express your values through investments and philanthropy? By addressing these questions, we guide our clients in making investment decisions that reflect their ideologies and contribute to a better world.

Planning for Transformative Wealth

Many individuals possess substantial Bitcoin wealth, which necessitates careful consideration of its implications for their families and communities. The case of Mircea Popescu, who allegedly held over a million Bitcoins and tragically drowned without clear succession plans, underscores the importance of strategic planning. Whether one owns 100, 1,000, or 10,000 Bitcoins, these assets represent transformative wealth that demands thoughtful succession and estate planning.

Bitcoiners, especially those who have weathered multiple market cycles and significant industry upheavals (such as the collapses of Three Arrows, Terra Luna, and FTX), often develop a mature and ideological perspective. They view Bitcoin not just as a store of value but as a revolutionary asset with the potential to transform their lives and the futures of their families. Structuring and managing this wealth strategically is crucial for its preservation and growth.

The Generational Shift and Social Upheaval

Our client base is largely composed of individuals younger than 50, reflecting a significant generational shift in attitudes towards wealth and investing. Younger generations, including Gen X and Millennials, are more ideologically driven compared to the Baby Boomers. They possess significant wealth, often accumulated through unconventional means like cryptocurrency investments, and are motivated by a desire to make a positive impact on the world.

This generational shift coincides with a period of significant social upheaval in the United States. The “Fourth Turning,” a concept popularized by William Strauss and Neil Howe, suggests that American society undergoes a major transformation every 80 to 100 years. We are currently in a crisis phase, characterized by societal reimagining and reorganization. This period of transformation is driving affluent individuals to align their wealth with their values, whether through investments, philanthropy, or family legacy planning.

The Role of Bitcoin ETFs

The introduction of Bitcoin ETFs has been a significant milestone, signaling growing acceptance of Bitcoin as a legitimate alternative asset class. While Bitcoin ETFs provide an easier access point for retail investors, there are concerns that they might simplify Bitcoin ownership to the point where investors miss out on understanding its deeper value. The influx of Bitcoin into ETFs could potentially centralize control, but the high HODL rates suggest that many Bitcoiners are committed to maintaining their holdings.

Global Strategies and Regulatory Risk

Navigating regulatory risks within the United States is a critical concern for many Bitcoin holders. At Bespoke Group, we help clients plan for these risks through global custodial relationships and structures, such as trusts in the Cook Islands or foundation companies in Switzerland. These structures can protect Bitcoin assets from regulatory reach while allowing clients to maintain control and benefit from their investments.

Our Approach at Bespoke Group

One of our specialities is sophisticated wealth management tailored for Bitcoin holders. We embrace a Bitcoin-centric ethos and understand the unique complexities and needs of our clients. Our approach is designed to balance traditional wealth management principles with the distinctive nature of Bitcoin assets.

We recognize that many Bitcoiners are ideological about their investments, especially those who have been involved for several years. These individuals often possess a long-term vision for their wealth, viewing it as a means to not only secure their own futures but also to make a positive impact on their families and communities. Our goal is to help these clients strategically plan for the future, ensuring that their Bitcoin wealth is managed and preserved in a way that aligns with their values and aspirations.

The following information is intended for general educational purposes only and should not be construed as legal or investment advice.