Connect with us

Uncategorized

How to Invest During Inflation

Published

on

How to Invest During Inflation

Inflationary periods in the economy can be a stressful time for many. Inflation often impacts your buying power and can make budgets seem tighter. 

You can take a few steps to help ease these effects and to help protect and maximize your portfolio. Read on to learn more.

How to Invest During Inflation

Investing during inflation may seem scary, but people tend to turn to a few trusted assets during these periods of the economic cycle. However, make sure you understand and are comfortable with the risk level of those investments as things can take a turn for the worse in any sector.

  1. Real Estate

As inflation rises, the price of real estate usually rises with it. Having real estate investments in your portfolio can be an excellent way to protect yourself throughout inflationary periods. Furthermore, if you are already making a passive income from renting out your real estate investment, this income may increase as inflation increases because your mortgage payments will stay the same, but as inflation increases you can also increase your rate for rent. Generally, investors like to turn to tangible assets as protection against inflation as they are more likely to hold value and withstand worsening economic conditions. 

  1. Commodities

Investing in commodities is also another strategy investors use as inflation continues to creep up. The value of commodities moves linearly to the rate of inflation. This means that as inflation increases, so does the value of commodities. Commodities are defined as raw materials used in the manufacturing of other goods and services.

When inflation rises, the demand for goods and services also usually increases. This in turn will raise the value of commodities that are required to produce those goods and services. If your portfolio is equity heavy, adding a few investments in commodities can help outweigh the negative effects of inflation as they are inversely correlated.

Advertisement
  1. Inflation-Indexed Bonds

Inflation-indexed bonds or Treasury Inflation-Protected Securities (TIPS) are one of the safest investments you can make to avoid the negative effects of inflation. These bond’s interest rates and principal are indexed to the rate of inflation. 

This means that unlike typical bonds that lose value as inflation increases, inflation-indexed bonds will actually increase in value at the same rate of inflation. It is important to note that given the low risk nature of these bonds, inflation-indexed bonds will generally be more expensive and have lower yields. 

  1. Certain Stocks

During inflation, certain sectors of the stock market tend to outperform the others. These sectors include energy, oil, gas, utilities and healthcare. Stocks usually have the most upside potential long term; however, with higher upside potential comes higher risk. However, unlike the other options on this list, stocks are much quicker to obtain and get rid of and are less capital intensive. These features make them a good option for those with less buying power and higher risk tolerance.

If you want to invest in these sectors of stocks but don’t feel comfortable with the risk, consider investing in exchange-traded funds (ETFs) or index funds related to the energy or utilities sector. ETFs and index funds like the S&P 500 increase diversification and make it easier and somewhat less risky to invest. 

  1. Precious Metals

Following the trend of investing in tangible assets, precious metals like gold are another way investors have historically tried to protect themselves from inflation. It is acknowledged that the price of gold tends to move inversely with the buying power of a dollar. This means that as inflation rises, so should the price and value of gold. 

Gold also is known as a “safe asset” meaning that it has a limited supply but is expected to hold its value during adverse economic conditions. Gold has historically been one of the most popular inflation-protected investments. 

What is Inflation?

Economically thinking, inflation is the increase in price of goods and services. As a result of increased prices, the buying power of currency decreases. Therefore, inflation is inversely correlated with the purchasing power of money as when inflation goes up, purchasing power goes down. Overall, inflation is representative of an economic slowdown.

What Causes Inflation?

Inflation can be caused by many different factors. The main factors causing inflation include demand pull, cost push and expanding money supply. 

Advertisement
  • A demand pull is defined as when the demand for goods increases at a rate suppliers can’t keep up with
  • Cost push is when production prices increase the price of goods and services
  • An expanding money supply is when the supply of money is greater than the amount of goods and services available 

Right now in 2022, the main causes of inflation are supply shortages causing a cost push, increasing consumer demand causing a demand pull and the economic recovery from COVID-19. 

When you Should Make Inflation-Informed Investments

Inflation-informed investments are a good idea. Whether inflation is occurring or not, having these investments in your portfolio can help keep you diversified and protected. The more proactive you are with investments the better off you will be. For example, stocks and other equities tend to drop in price when inflation is nearing, meaning you may be able to get them at a natural discount. On the other hand, real estate investments could be better off being made prior to inflationary periods as the initial investment you have to make will be lower. 

Frequently Asked Questions

Is it good to invest during inflation?

Certain investments can be good to make during inflation like investments in energy, oil and utility stocks.

Advertisement

What should I buy before hyperinflation hits?

Before hyperinflation hits, consider putting your money into TIPS, real estate or commodities. 

Advertisement

Brave Group Inc

Japanese Virtual IP Firm Raises $10 Million To Accelerate Metaverse Business

Published

on

Japanese Virtual IP Firm Raises $10 Million To Accelerate Metaverse Business

Brave Group Inc., a Japanese virtual IP firm, recently said it had raised $10 million in new capital and that the company expects to use part of these funds to boost its “solution services for clients in the metaverse marketing business.” Taking part in Brave Group’s latest funding round were two local companies, foreign investment funds, as well as individual investors.

Metaverse Market Growth

A Japan-based virtual IP business, Brave Group Inc., recently said it had raised $10 million in new funding, thus bringing the total raised so far to $18 million. The company is set to use the new capital to strengthen its existing business operations and to “expand its solution services for clients in the metaverse marketing business.”

In a recent statement, Brave Group revealed that Japanese companies like Dawn Capital and Osaka Gas Co. Ltd. had participated in the round that also featured “foreign investment funds and individual investors.” In remarks following the announcement of the capital raise, Kazuhiro Ishikura, a general partner at Dawn Capital, said:

Advertisement

As the boundary between real and virtual life disappears, the form of entertainment will also change, and new IP content KOLs are expected to be born. As the metaverse market grows globally, we believe that the Brave group’s content will be at the center of the enthusiastic virtual communities that will emerge. We hope that the strength of the anime and manga culture that Japan has cultivated over the years will be brought to the world virtually.

Yuichi Sakamoto, senior general manager with Osaka Gas’ innovation department, is quoted stating his company is ready to help Brave Group Inc. “realize lifestyles and businesses that respond to the New Normal.”

For his part, the CEO of Brave Group Inc., Keito Noguchi, said through the $10 million fundraise, his company would now “maximize the impact of Brave group’s IP not only in Japan but also in the world.”

What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

Advertisement

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Advertisement

Continue Reading

Saddle.Finance

Saddle․Finance Creates New Standards For DeFi Trading

Published

on

Saddle․Finance Creates New Standards For DeFi Trading

sponsored

DeFi is a sub-sector in the crypto industry that has witnessed significant innovation since its inception. However, the narrative has struggled to stay consistent, affecting the domain overall. The current bear market has wiped out more than half of DeFi Total Value Locked (TVL), hampering innovations. Furthermore, several projects have simply forked (copied) existing protocols and brought zero ideas to the market.

Advertisement

Amidst all of this, one project is making strides with the best innovations DeFiers have seen in a long time. Saddle Finance is the protocol that enables efficient DeFi trading for stablecoins and pegged-value crypto assets like wETH and wBTC. It redefines DeFi trading by offering cheap, efficient, swift, and low-slippage swaps for traders and high-yield pools for Liquidity Providers. The protocol has facilitated over $2B in transaction volume to date.

Enabling an Efficient and Secure DeFi Trading Experience

Saddle Finance is an AMM-based decentralized exchange (DEX) running on multiple blockchains, including Ethereum, Fantom, Arbitrum, Optimism, and Evmos. It is designed specifically for trading stablecoins and pegged crypto assets.

The platform is ideal for HODLers and newbies because of its easy-to-use interface. Its strongest point, however, is that it ensures minimum slippage while swapping assets. This is accomplished through innovative liquidity pools that use the StableSwap mathematical formula to maintain market liquidity.

The protocol is also known for its top-notch security. It has been audited by some of the best auditing firms in the sector, including Certik, Quantstamp, and OpenZeppelin. Moreover, the platform is backed by several renowned venture capital firms like Polychain Capital, Electric Capital, Dragonfly Capital, Framework, Coinbase Ventures, Nascent, and BoostVC.

Advertisement

The project’s most intriguing aspect is its open collaboration. Saddle’s code is completely open-source, inviting Web3 developers to join the mission and build on top of the protocol. Moreover, its recent SEMPI project has enabled developers to get compensated for developing and forking the protocol.

$SDL: The Utility Rich Token Powering Saddle Ecosystem

$SDL is the native utility token of Saddle Finance. Its use cases revolve around staking, yield farming, and governance. The platform recently announced the completion of $SDL’s first vesting stage. Thus, users who provided funds to its liquidity pools can now trade and transact $SDL tokens.

They can also stake $SDL on saddle.exchange to earn rewards and receive the $veSDL tokens. $veSDL is the vote escrowed (ve) token that will serve as the platform’s governance token. Stakers will be able to vote with $veSDL and manage the $SDL supply in associated liquidity pools. Beyond that, users can provide liquidity to the SDL/WETH pair on SushiSwap

In the future, Saddle also plans to create more initiatives to take the protocol to the next level. These include migrating to on-chain governance, adding liquidity to $SDL through Tokemak, and introducing a new gauge to unlock extra staking yield boosts. The protocol will also issue bonds through Olympus Pro to generate more protocol-owned value.

Advertisement

Similarly, launching a borrowing function against liquidity providers and adding leveraged yield farming through Rari Capital’s Fuse is also part of the plan. Lastly, Saddle intends to improve its virtual swaps and launch new services where users can deploy their own customizable pools.

Building the Future of DeFi

Although the current bear market has hit DeFi hard, the sector’s long-term potential is enormous. Innovations are critical in keeping this space alive. Saddle Finance is thus heavily focused on creating innovative solutions in DeFi. Its stableswap model, along with robust tokenomics, is an excellent example of genuinely innovative solutions.

The $SDL token and its utilities across various protocols clearly indicate token-level innovation. It is now tradable on the platform. Join the emerging revolution by staking $SDL on saddle.exchange—contribute to DeFi’s future while earning passive income.


This is a sponsored post. Learn how to reach our audience here. Read disclaimer below.

Advertisement

Bitcoin.com Media

Bitcoin.com is the premier source for everything crypto-related. Contact ads@bitcoin.com to talk about press releases, sponsored posts, podcasts and other options.

Advertisement
Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Continue Reading

China

Chinese State-Run Media Warns About Bitcoin’s Price Falling To Zero As Regulators Issue Fresh Crypto Warning

Published

on

Chinese State-Run Media Warns About Bitcoin’s Price Falling To Zero As Regulators Issue Fresh Crypto Warning

A Chinese state-run newspaper has published an article warning about bitcoin’s price falling to zero amid the crypto market sell-off. Meanwhile, financial regulators in Shenzhen have issued a new warning about cryptocurrency.

State-Run Newspaper Warns About Bitcoin Becoming Worthless

China’s state-run newspaper Economic Daily published an article warning about bitcoin Wednesday, according to SCMP. The nationwide newspaper is directly under the control of the Central Committee of the ruling Chinese Communist Party.

The article warned that investors should beware of the risk of bitcoin prices “heading to zero” amid the recent crypto market sell-off.

Advertisement

“Bitcoin is nothing more than a string of digital codes, and its returns mainly come from buying low and selling high,” the newspaper details, adding:

In the future, once investors’ confidence collapses or when sovereign countries declare bitcoin illegal, it will return to its original value, which is utterly worthless.

The newspaper details that the lack of regulation in Western countries, such as the United States, helped create a highly-leveraged market that is “full of manipulation and pseudo-technology concepts.” The article describes it as an “important external factor” contributing to bitcoin’s volatility.

The warning from the state-run media reflects Beijing’s firm stance against cryptocurrency and related activities that the government has outlawed.

New Warning About Crypto by Chinese Regulators

On Tuesday, the Financial Regulatory Bureau of Shenzhen, the Shenzhen Central Sub-branch of the People’s Bank of China, and the Shenzhen Development and Reform Commission also jointly issued a warning that investors should be vigilant of illegal financial activities relating to crypto and how to avoid being scammed.

The notice states that virtual currency trading and speculation “seriously endanger” the safety of people’s property and breed gambling, illegal fundraising, fraud, pyramid schemes, money laundering, and other illegal and criminal activities. It also claims that they disrupt the country’s economic and financial order.

Advertisement

The financial authorities cited a statement published in September last year by China’s central bank, the People’s Bank of China (PBOC), and 10 ministries and commissions declaring that virtual currency is not legal tender and related activities are illegal financial activities.

What do you think about the state-run newspaper publishing a warning about bitcoin’s price sinking to zero and the Chinese regulators warning about illegal crypto activities? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Advertisement

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons, lev radin

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Advertisement
Continue Reading

Trending

Get our daily News updatesSignup to get instant updates straight to your email