Bitcoin (BTC 4.39%) Markets are enjoying a post-election rally as they price in the expected effects of President Donald Trump’s economic policies, some of which appear to favor crypto. In conclusion, Bitcoin recently set a new all-time high; this time it’s just over $80,000.

This is something that has not gone unnoticed by Mexican billionaire Ricardo Salinas Pliego, the third richest person in Mexico and among the 175 richest people in the world. On social media, he recently posted a chart of Bitcoin above the $77,000 level, sharing the following message (in all caps): “My nephews,… I TOLD YOU THIS!… BUT DON’T FEAR… YOU STILL HAVE A LOT OF TIME AHEAD AND BUY MORE YOU CAN TAKE IT!” So, should you follow this billionaire’s lead and buy Bitcoin?

This billionaire has been buying Bitcoin since 2020

The first thing you need to know about Salinas, apart from the fact that he owns a number of successful businesses as the chairman of Mexican conglomerate Grupo Salinas, is that he has been supporting Bitcoin for several years. For example, he claimed to have invested up to 10% of his liquid assets in Bitcoin in 2020.

And since 2020, he has been making a public statement on why retail investors should also buy Bitcoin. He focused primarily on Bitcoin’s ability to serve as a hedge against two economic risks he had seen firsthand in Latin America: inflation and fiat currency devaluation.

Bitcoin as a hedge against economic risk

Let’s start with inflation, because it’s an issue that has recently emerged as a strong political campaign issue in the United States. Bitcoin is inherently disinflationary. This is because the total lifetime supply of Bitcoin is limited to 21 million coins and the rate of new Bitcoin issuance is carefully controlled by an algorithm. There is no central authority like a central bank that can create more Bitcoin.

Moreover, Bitcoin every four years halving eventThis further slows down the pace of new Bitcoin issuance. After the halving, the new supply of Bitcoin is halved, and this is what makes Bitcoin less inflationary over time. Given that 20 million of the 21 million coins are currently in circulation, we have reached a point where the rate of new Bitcoin issuance has slowed to a trickle.

As a result, Bitcoin is becoming increasingly popular as an inflation hedge, similar to gold. In fact, Salinas himself suggested that Bitcoin is gold for the modern world. If you are looking for a long-term store of value, Bitcoin has the same characteristics as gold, especially the fixed lifetime supply. So, if you want to protect your wealth from the ravages of inflation (which many view as a tax on fiat currency), Bitcoin could be a very attractive investment opportunity.

Image source: Getty Images.

The investment case for Bitcoin is even stronger if you take into account its concept. fiat currency devaluation. In many emerging markets, this is a very real possibility due to weak government economic policies that have devalued national currencies.

For example, consider the case of Nigeria, where the national currency (Naira) has been devalued to the point where a single Naira is now worth less than a satoshi. Satoshi is the smallest unit of Bitcoin and is equivalent to 100 millionth of a Bitcoin.

At the end of May, Salinas commented on the plight of the Nigerian Naira, telling his followers on social media: “#buyBITCOIN and protect them, be careful!!!” He says the best way to protect yourself against fiat currency devaluation is to buy Bitcoin.

In the US context, a rapid devaluation of the dollar may seem unthinkable. But this is not unthinkable for Bitcoin purists, who have openly suggested that the US government’s staggering $35 trillion debt burden could lead to a massive devaluation of the currency in the future. This could lead to a collapse in the value of dollar-denominated assets. So, if you’re worried about the long-term outlook for the US economy, one way to hedge your bets is to buy Bitcoin.

Should you buy Bitcoin?

At the end of the day, Salinas makes a very compelling case for why you should buy Bitcoin right now. There’s a reason Bitcoin has caught fire as a political campaign issue this year and is currently soaring in value. Deep down, many people realize that something is not right with the current state of the US economy and are looking for answers.

For some investors, that answer may be Bitcoin. But remember this: If you plan to buy Bitcoin, be prepared for a potentially bumpy ride. Although Bitcoin appears to surge immediately after the election, this rarely lasts for long due to its historical volatility.