September 27, 2022 (Investorideas.com Newswire) Cryptocurrencies are not correlated with the stock market because they are not reliant on the traditional financial system. This means cryptos will not necessarily follow suit when the stock market crashes. Yet, crypto volatility saw only 6% of investors buy crypto to hedge against the recession in 2022, according to data from BanklessTimes.com.
Speaking on the data, BanklessTimes CEO, Jonathan Merry, said, “Most investors didn’t consider buying Crypto an excellent way to hedge against recession. The crypto market has been bearish in 2022, making investors slow down. Besides, the fear of the unknown engulfed the sector after Terra Luna’s crush. Most investors believe Crypto might be an easy way to lose their investment.”
How to Hedge Against Inflation
Diversification is a better way to hedge against recession. You should not put all your investment into one venture because you could lose money if the firm fails or lowers its stock price.
Having a diversified portfolio reduces vulnerability. If one firm underperforms, the gains from the others may make up for it, protecting your investment capital.
Inflation erodes the purchasing power of investments, making them worth less in the future. By investing in assets that are not as affected by inflation, you can keep your buying power constant.
Cryptocurrency is the Future
Despite its volatility, Crypto gives returns. The market will become bullish when the lower moments go, and investors will smile at the bank.
As the world moves towards a digital economy, those who get on the crypto train early will reap significant rewards. Full story and statistics can be found here: Only 6% Of Investors Have Bought Crypto to Hedge Against the Recession in 2022
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