Cryptocurrencies as protective assets in the investment market in 2022.
Investors in Europe and around the world are concerned about the ongoing economic crisis, with capital flight from UK and German government debt bonds. The high level of inflation in fiat currencies forces the search for alternatives.
For investors from the CIS countries this is even more relevant with the adoption of the eighth package of EU sanctions against Russia.
Public debt and government debt bonds are one of the safest investments with trillions of dollars of liquidity.
Where can CIS investors channel all this liquidity, and do cryptocurrencies have the potential to become protective assets during the global economic crisis?
Investors should now exhale a bit and calm down to make informed decisions.
At a time when the global economy and the old fiat financial system are going through a severe crisis, it is worth reallocating part of your portfolio into cryptocurrencies. If only to protect your savings.
Sceptics believe the crypto market is now just one of the highly speculative sectors of the global derivatives market.
And while both of these markets rose during the coronavirus epidemic amid high stimulus, they are now doomed to fall with the Fed’s rate hike.
Everything going on in the global economy is much deeper and a fundamental change is needed to overcome the crisis, including greater use of cryptocurrencies as a means of settlement and a way to save.
For this reason, separating bitcoin and other cryptocurrencies from the rest of the market is unlikely at the moment, including because there are virtually no alternatives other than cryptocurrencies for CIS investors.
Three main positive factors for the cryptocurrency market.
1. The regulation of international payments and trade wars only intensifies with each new wave of geopolitical tensions. This leads to cryptocurrency prices going up as liquidity flows into crypto.
2.Another underestimated advantage of the crypto market is the ability to create decentralised investment solutions with a high degree of privacy. “Major players have been paying attention to the crypto market for a long time, but this market has virtually no solutions for investing in classic assets. Now such solutions are also becoming available for classic investment assets such as equities and preIPOs. With the advent of such solutions, investors will be able to invest in classic assets using closed blockchain solutions to protect themselves from direct sanctions.
3. the third factor, the rise in the price of BTC as digital gold and a reserve asset that no one controls, which means it remains the only reliable means of savings. Bitcoin has virtually no inflation, it is very easy to buy in almost any country in the world, and there is no limit to the amount of money that can be invested there. Capital will flee there from the ongoing crisis of the global financial system, buying bitcoin in the long and even medium term over the horizon of a few months is a profitable investment and a way to preserve your money.
And generally speaking, when else to buy and invest but in a market downturn?
The founder of the Rothschild clan once said that one should buy property when blood is pouring down the street, even if it is your own. His quote later turned into a stock market truth: “Buy when the blood in the street is pouring down a river, sell when the victory trumpets are sounding.”