How inflation reduces the buying power of your money.
Is crypto a good investment against inflation. Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading cryptocurrency ETFs and alternative investments on Investopedia. 1 high inflation is unlikely to happen and 2 cryptos. Precious metals are traditionally considered to be a smart way to hedge against high inflation but can cryptocurrencies like Bitcoin and Ethereum also.
Low inflation may be good for the economy but its bad for your wallet. This limited supply allows the cryptocurrency in question to act as a hedge against the inflation that is affecting fiat currency. This has a lot of market participants turning their hard earned money into store of value investments like stocks bonds crypto bitcoin or precious metals among others.
And the reason is simple. There is more push for cryptocurrency to win over USD as the currency of the future. Therefore it is important to find the right strategies and investments to hedge against inflation.
Gold is traditionally a great investment during inflation and cryptocurrency is being used in the same way now. The reason why some forms of cryptocurrency can act as a hedge against inflation is precisely the same reason gold can. If youre interested in using crypto to protect against inflation you can get started through Coinbase.
If inflation induced a recession for example investors might respond by stepping away from riskier assets such as cryptocurrencies. While inflation is generally considered to be a positive attribute of a healthy economy it is often unwise for people to hold their savings in cash due to cash losing purchasing power over time. Crypto enthusiasts often talk about bitcoin as a hedge against inflation.
The argument is that central bank money printing will lead to inflation or the decrease in the value of money. That is while Bitcoin can serve as a hedge against inflation in the long run it is not traded as such on a day-to-day basis. There isnt only one best cryptocurrency to buy.