If you ask me, I think it is part of the reason why the crypto market is having such a bull run recently. Just look at the inflation that is spewing over from all the money printing that is going on. Again this is basic mathematics – if someone is increasing the supply of something (lets say this something is named $), there will be an increase in the number of that something. And if demand remains the same, won’t that make that something worth less? It just makes perfect here. Of course whether the government officials will pretend that inflation is not “that bad” or that inflation “doesn’t exist” or that inflation “is not here yet” is another question.
But if you have been reading just the headlines this few months, you know that governments have been printing money. All in the hopes of pumping their economies up and hoping to stave off a recession. The pandemic that currently still on going right is probably the main cause of concern. But if you ask me, they have went overboard. Especially when we are talking about the US and their monetary policy. They have been one of the worst offenders when it comes to pumping out the green and this probably is why smarter investors are starting to get into crypto. It is a hedge against inflation. I know that traditional investors always say that there is no logic for crypto. Or that it is just “fake internet money”. But honestly it is more than that. Of course there are plenty of scams going on in the crypto sphere, but there are scams everywhere as well. Not just in the cryptoverse. If you want to invest in something, that something should be something which will see at increase in value in the future. The US Dollar or whatever fiat currency you are holding right now will most probably not increase in value in the future. Again this is just maths. You just cannot pretend that it is not happening. Well at least you cannot pretend for too long anyway.
So that is why I do think that even if you are a low risk investor, you might want to start looking at cryptos. BTC and ETH are still decently safe compared to other crypto currencies. And for the low risk investor, these two are probably the best bet as we can see from their lower volatility. Your best bet against inflation as well. However you will probably need to hold them for sometime first, unless you time the market right. And big time investors have already bought in a while back. They do know that BTC and ETH are their best hedge against the upcoming inflation. These are especially good if you are a new comer to the crypto market if you ask me. They will not fall too far even during a bear market. And if you ask me, I don’t think there will be a crypto winter happening anymore. Sure market cycles will happen. But I find it highly unlikely that prices of BTC will drop to 10% of its value for 2-3 years with nobody (including institutions) daring to buy and hold BTC. Come on. I think this will never happen again. Unless of course if a major black swan event happens. I am looking at you SEC. These are the people we should all look out for.
I am not a financial advisor. Always do your own research when it comes to investing. Take care and I will see you in the next post. Bye for now.