3 Steps to Living Above Inflation with Crypto: It Was Never As Hard As You Think
"What? This was not the price last time?"
Joan was furious. The prices of things keep going up at a ridiculous rate. She has had to cut down on eating her favourite meals to save costs. Now, even mere tomatoes and peppers are getting super expensive. She can’t even buy eggs without flinching. Janet lives in a third-world country that is plagued with hyperinflation.
"I need to start earning in dollars.”
Like many residents of third world nations, Joan was thinking the smart way; she wants to take advantage of the high dollar rate.
But, Joan has an issue, she thinks she doesn’t have the time to learn a new skill. And to be candid, she’s not interested in making the career change that getting a job that pays in dollars will require. But, she needs a solution fast.
"What can I do now?"
You are like Joan. You're fairly satisfied with the income you earn but want a way to save your money without it losing value to inflation. You know you may need to do something around dollars, but don't know where to start from.
Let me show you in 3 steps how you, like Joan, can save the value of your money against inflation using cryptocurrencies which can function pretty much like dollars.
What is Inflation?
Inflation is the rate at which the price of anything appreciates in the currency which is a frame of reference. Let me explain.
Contrary to popular opinion, inflation is not a round figure, it varies from goods to goods. For instance, if last week, you bought a loaf of bread on Monday for 100 ZAR and on Saturday found the same type of bread selling for 150 ZAR, the inflation rate for that commodity is at 50%. So although the inflation rate may be quoted to be at 15.7%, it is actually at 50% for that particular product.
During inflation, the price of goods increases while the income rate stays the same. Yet, you need to save and invest. But, whichever you do, you cannot afford to do either of those in your local currency. The worth of your money will be drastically reduced as time passes.
What can you do?
Step 1: Consider Saving in Stablecoins
Not all cryptocurrencies are extremely volatile. You have, and will hear of cryptocurrencies plummeting in value, but not with stable coins.
Stablecoins are cryptocurrencies, but they don't get affected by volatility like popular cryptocurrencies like bitcoin, ether, and ripple. This is because they are backed to asset classes that are not as volatile as normal cryptocurrencies.
Such asset classes included gold, the US dollar. According to Next Advisor:
Where Bitcoin and Ethereum rise and fall by the day and even hour, stable coins promise to maintain their value because they’re pegged to less volatile assets, like the U.S. dollar, euro, precious metals, or commercial paper.
Tether (USDT) is known as the first and largest stable coin, and it was created in 2014. Owning 1 USDT is equivalent to owning 1 US Dollar. Another coin in this category is the USD Coin. It's directly tied to the US dollar. There's the Real USD (RUSD)
Why Stable Coins?
They are tied to stable fiat currencies like USD and Euro.
The assets they are tied to suffer from inflation, but at a much slower rate than that of your country's currency.
It's easier, cheaper, and faster to exchange your local currency for cryptocurrencies than the actual US dollars.
Step 2: Exchange Your Fiat for Stable Coins
On the Afridex Exchange, you can exchange your normal fiat currency for stable coins like USDT. Without your location or national legal regulations on cryptocurrency posing a challenge.
Step 3: Make a Habit of Hedging against Inflation
If this is a great way to mitigate inflation, which affects you and everyone you care about, you want to make a practice of saving in stable coins.
- Once you get your pay, set out a percentage each month to go into your Stablecoin portfolio.
- Do your research on other stable currency projects you can save with moving on.
- Learn to trade cryptocurrencies. This will help you make informed crypto-financial decisions and trades with high yield potentials.
- Think long-term.
- Stablecoins aren’t as stable as they’re promoted to be. Since they are tied to fiat currency, their values are affected by the economic state of a nation. However, the rate of inflation is significantly lower compared to many other currencies.
- Trading cryptocurrencies involves significant risk and can result in the loss of your capital. You should not invest more than you can afford to lose and you should ensure that you fully understand the risks involved.
- Before trading, please take into consideration your level of experience, purchase objectives, and seek independent financial advice if necessary.
If Joan can sign up on afridex.io and start exchanging her local currency for USDT dollars, regardless of the regulatory laws against cryptocurrencies in her nation, you can too. Inflation has got nothing on you.
Sign up on the Afridex Exchange today.