At a time when most central banks in the world are "printing" fresh money and "pumping" it into the system in order to provide the necessary liquidity due to the crisis caused by the Covid-19 pandemic, it is expected that a larger amount of money leads to a drop in its relative value.
Inflation in the US reached its highest value in the last three decades in October. The increase in prices was recorded for both basic foodstuffs and luxury goods. The reason for this situation, besides the "pumping" of money, can also be a constant lack of supply and high demand.
The US Department of Labor announced that the October consumer price index, which measures how much consumers pay for goods and services, increased by 6,2% compared to last year. It was the fastest 12-month growth since 1990 and the fifth month in a row with inflation above 5%.
This would mean that if 6,2% inflation were to hold for 10 years, the current $100.000 would become $54.800.
This situation spreads anxiety and burdens investors, forcing them to look for ways to preserve the value of their money. The traditional way of protection against inflation is investing in gold, but in modern business conditions other ways have appeared. Cryptocurrencies are considered one of the most popular, among which Bitcoin is the leading one.
Bitcoin as a store of value
Cryptocurrency holders are in a unique position to benefit from, or at least shelter from, these latest developments. Namely, the decline in the value of fiat currencies, such as the dollar, has emphasized the supremacy of Bitcoin and other altcoins when it comes to protection against inflation.
Bitcoin broke another record and is on the verge of hitting $69.000 for the first time after inflation data fueled arguments about Bitcoin as a store of value.
The largest cryptocurrency by market value rose as much as 1,9% to $68.991 last Wednesday, surpassing the previous high set earlier in the week in New York.
According to data from Bitcoin Stimulus, Americans who in April 2020 invested their $1.200 checks received as part of the government support program into Bitcoin, now have $12.172 worth of BTC, an increase of 914%.
Crypto supporters argue that unlike the dollar or any other traditional currency, the digital coin is designed to have a limited supply, so it cannot be devalued by a government or central bank that would distribute too much of it. That is why Bitcoin and other cryptocurrencies can be good guardians of the value of money and a safe harbor for all investors and traders.
How can you invest in Bitcoin?
The great thing about cryptocurrencies is that they are relatively easy to invest in and many people do it every day.
While traders can definitely make a profit by buying cryptocurrencies when the price goes down and selling them when it goes up, the process can take a long time.
Maybe it's time to consider CFD trading.
The advantage of cryptocurrency CFD trading is that it allows traders to potentially make money by correctly predicting whether the price of a cryptocurrency will rise or fall. In addition, in this way, traders can use leverage to significantly increase their potential profit.
Now you can do it in a very simple and efficient way - by opening a trading account with a licensed investment company Limit Prime Securities.
This renowned company is regulated by the Capital Market Commission of Montenegro and through its platform offers you direct access to world stock markets and trading in the most attractive financial instruments.
If you want to start trading, you can register here, and for more information you can call +382 67 242 242 and one of the employees of Limit Prime Securities will meet you.
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