Bitcoin could be the next big inflation hedge
Since its inception as a virtual currency, Bitcoin has taken the market to a storm which is still not over. Over the period the users of bitcoin as a virtual currency are increased in which big names are also added now. Many high profile investors are now betting on Bitcoin as the new option to hedge against inflation. Earlier, people considered safe assets like Gold when it comes to handling volatility in the markets. As the COVID19 pandemic has caused a lot of economic turmoil across the world, various governments and central banks have announced stimulus to revive the economy. In this situation, inflation is all set to go up shortly as the asset value of the currency is decreased by too much stimulus. In this situation, Bitcoin can offer some relief as it is on a rising trend for many years.
Bitcoin turning into a safe asset
The coronavirus pandemic has resulted in lots of job loss, and the economy is not showing any positive signs in the near future. The interest rates are going to remain near 0% till 2022 according to central bank reports. This has led to a huge surge in Bitcoin prices in the last few weeks. Recently, it crossed the crucial $10000 mark, which showed how much confidence investors have on this asset.
Crypto markets becoming user friendly
Earlier, it was not so easy to access the cryptocurrency markets in different regions of the world. The charges were on the higher side, and investors did not have much knowledge about this asset class. However, the modern-day investor is savvy enough to use Bitcoins for various transactions. Apart from that, many investors are also using it as a hedge against inflation as this can secure their investments in times of volatility.
The trend with investing in cryptocurrency is going to last for a long time, considering the weakening economic system around the world. With the crypto market becoming easier than before, more and more investors are now keen to invest in Bitcoin for various reasons. As other asset classes have become volatile, they are trying to hedge the currency positions by investing some money in Bitcoin. Apart from that, many exchanges are offering bitcoins for trading along with other currencies. In this way, users can hedge their positions with Bitcoins and combine their investments with other currencies in the same account.