Bitcoin (BTC 4.39%) has seen a post-election rally as the market priced in the expected effects of President Donald Trump’s economic policies, including some that appear to favor crypto. Therefore, Bitcoin recently set a new all-time high, this time at just over $80,000.

This is something that has not gone unnoticed by Mexican billionaire Ricardo Salinas Pliego, who is the third richest person in Mexico and one of the 175 richest people in the world. On social media, he recently posted a chart of Bitcoin above the $77,000 mark, accompanied by the following message (in capital letters): “NEPHEWS, … I TOLD YOU SO! … BUT DON’T BE AFRAID…THERE’S STILL LONG TIME TO COME AND YOU CAN STILL BUY MORE!” So, should you follow this billionaire’s example and buy Bitcoin?

This billionaire has been buying Bitcoin since 2020

The first thing you need to know about Salinas – aside from the fact that he owns a number of remarkably successful businesses as head of Mexican conglomerate Grupo Salinas – is that he has been an advocate of Bitcoin for several years now. In 2020, for example, he suggested that he had invested up to 10% of his cash in Bitcoin.

And since 2020, he has been very publicly explaining why individual investors should also buy Bitcoin. He primarily focused on Bitcoin’s ability to act as a hedge against two economic risks he saw in Latin America: inflation and the devaluation of fiat currency.

Bitcoin as a hedge against economic risk

Let’s start with inflation, because it’s a topic that has recently emerged as an important political campaign issue in the United States. Bitcoin, by its very nature, is disinflationary. This is because the total lifetime supply of Bitcoin is capped at 21 million coins and the rate of new Bitcoin issuance is carefully controlled by an algorithm. There is no central authority – such as a central bank – that can create more Bitcoin.

Additionally, every four years, Bitcoin has a halving eventwhich further slows down the pace of new Bitcoin issuance. After the halving, the rate of new supply of Bitcoin is reduced by half, and this is what makes Bitcoin disinflationary over time. We have already reached a point where the pace of new Bitcoin issuance has slowed, given that 20 million of the 21 million coins are already in circulation.

As a result, Bitcoin is becoming increasingly popular as a hedge against inflation, much like gold. In fact, Salinas himself has suggested that Bitcoin is gold for the modern world. If you’re looking for a long-term store of value, Bitcoin has some of the same characteristics as gold, particularly the lifetime fixed supply. So, if you are looking to protect your wealth from the ravages of inflation (which it sees as a tax on fiat currency), then Bitcoin could be a very attractive investment opportunity.

Image source: Getty Images.

The investment case for Bitcoin is even stronger when we take into account the concept of fiat currency devaluation. In many emerging markets, this possibility is very real due to poor government economic policies that devalue the national currency.

Take for example the case of Nigeria, where the national currency (the Naira) has been devalued to such an extent that a single Naira is now worth less than a satoshi. The satoshi is the smallest denomination of Bitcoin, equivalent to 100 millionth of a Bitcoin.

In late May, Salinas commented on the fate of the Nigerian naira, telling his followers on social media: “Buy #BITCOIN and keep them, be careful!!!” The best way to protect against the devaluation of fiat currency, he says, is to buy Bitcoin.

In the American context, a rapid devaluation of the dollar might seem unthinkable. But this is not unthinkable for Bitcoin purists, who openly suggest that the US government’s staggering $35 trillion debt could lead to a massive devaluation of the currency at some point. This in turn could lead to a collapse in the value of dollar-denominated assets. So, if you’re feeling nervous about the long-term outlook for the U.S. economy, one way to hedge your risks is to buy Bitcoin.

Should you buy Bitcoin?

Ultimately, Salinas makes a very compelling case for why you should buy Bitcoin right now. There’s a reason why Bitcoin caught fire as a political campaign issue this year and why its value is skyrocketing now. Deep down, many people recognize that something is wrong with the current state of the American economy and are looking for answers.

For some investors, that answer might be Bitcoin. However, remember: if you’re considering buying Bitcoin, be prepared for a potentially rocky journey. Although Bitcoin appears to rise immediately after the election, this is rarely the case for long due to its historical volatility.