Inflation Surges To 5.4%: Which Assets Should I Buy to hedge inflation?

Inflation Surges To 5.4%: Which Assets Should I Buy to hedge inflation?

Inflation is a form of tax that does not require legislation

What is inflation?

Inflation is the gradual loss of a currency’s buying value. A quantitative measure of the rate at which buying power decreases over time as reflected in an economy’s average price level of a basket of selected goods and services.

A rise in the general level of prices, usually measured as a percentage, signifies that a unit of currency now buys less than it did previously. Inflation differs from deflation, which occurs when money’s purchasing power rises but prices decline.

Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair. — Sam Ewing

It’s not about the speed; it’s about the course we’ve chosen. The rate is, of course, determined by a variety of factors, including the degree of the price correction. However, the likelihood of the supply shock translating into long-term entrenched inflation is likely to be more relevant.

Key Takeaways

• Inflation is defined as the rate at which the value of a currency falls and, as a result, the overall level of prices for goods and services rises.
• Inflation can be viewed positively or negatively depending on one’s perspective and the rate of change.
• Those with tangible assets, such as real estate or stocked commodities, may prefer to see some inflation because it increases the value of their assets.

Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man. — Ronald Reagan

What is Hedging?

Hedging is typically thought of as an advanced investing approach, yet the laws of hedging are quite straightforward. Hedging has become more popular as a result of the demand and associated analysis of hedge funds. Nonetheless, it is not commonly acknowledged as a word or a method. People may be unaware that they hedge many items in their daily lives, which often have little to do with the crypto market.

As with any risk/award tradeoff, hedging settlements in lower returns than if you “bet the farm” on a light property, but also decreases the risk of losing your shirt. Many hedge funds, by distinction, take on the risk that people want to transfer away. By taking on this supplementary risk, they hope to benefit from the accompanying rewards.

Most people, whether they realize it or not, have engaged in hedging. A hedge, for example, is when you get life insurance to sustain your family in the event of your death. You pay an insurance provider in monthly installments for the coverage it provides. Although the traditional definition of hedging is an investment made to reduce the risk of another investment, insurance is a real-world example of a hedge.

Key Takeaways

• Hedging, whether in your collection, your business, or anywhere else, is about reducing or transferring risk.
• Hedging is a proven strategy that can help preserve your portfolio, home, and business from uncertainty.
• Besides shielding an investor from numerous types of risk, it is believed that hedging makes the run more efficient.

How to hedge against inflation in your crypto portfolio?

When people begin to anticipate inflation, it no longer serves you well, because any benefit of inflation stems from the fact that you do better than you expected.

Stability improves every portfolio; it acts as a buffer when the crypto market reaches a bad patch. However, avoiding cryptocurrency entirely may mean that your investment will not rise faster than the rate of inflation.

Bitcoin has been pushed as a portfolio hedge, and many crypto aficionados consider it as a gold alternative. However, Bitcoin’s recent price volatility shows that it is far from a safe-haven asset.

A dramatic 40% drop from April’s high just adds to the skepticism. If inflation, for example, causes a recession, investors may respond by shunning riskier assets such as cryptocurrencies. Bitcoin is not like most other inflation hedges.

Its value is totally determined by the willingness of others to keep it: the digital token is not linked to any other asset, such as oil, real estate, or business revenues, which may naturally arise in value in parallel with consumer prices. Inflation and Bitcoin may both rise, but the two are not necessarily linked.

The majority of economists appear to assume that inflation wouldn’t return. They cite, to mention a few, low consumption and excess supply, the continuous influence of technology and demographic shifts, low money velocity, and a weak labor market.

This has already resulted in deflation in certain major economic areas. Inflation, while not always a terrible thing, is not always a bad thing. Inflation that is “good,” as a result of economic growth and low unemployment, aids in closing the supply-demand gap, encouraging investment, and even greater economic expansion.

Reallocate Money Into Crypto

If inflation returns, the crypto market will take a slap in the face, but the investors may get a shot in the arm. Consider that you shifting 10% of your portfolio from crypto to equities to capitalize on this potential trend. Another option is to purchase preferred crypto.

These liquid securities will pay a higher yield than most types of trade and may not depreciate as much as trading when inflation occurs. Stablecoins are a third option in which the crypto price rises and falls in a somewhat predictable manner throughout the economic cycle while also paying consistent dividends.

Diversify your portfolio

Without sticking to one cryptocurrency throughout your trading, diversify your trading in altcoins, stable coins, and don’t forget the top 5 coins that always have a surge to increase from the downtrend. Trades issued by native issuers can also provide investors with exposure to fixed income that may not decline in value if domestic inflation occurs.

Best crypto assets to hedge against inflation

Bitcoin(BTC)

Bitcoin is a peer-to-peer online currency, which means that all transactions take place directly between equal, independent network participants, with no need for any intermediary to allow or facilitate them. According to Nakamoto, Bitcoin was created to allow “online payments to be sent directly from one party to another without going through a financial institution.”

• Some concepts for a similar type of decentralized electronic currency predate BTC, but Bitcoin is the first cryptocurrency to be used in practice.
• Even after losing its unrivaled dominance, it is in large part to the pervasiveness of platforms that provide use-cases for BTC: wallets, exchanges, payment services, online games, and more.
• Bitcoin remains the largest cryptocurrency, with a market capitalization that fluctuated between $100 and $200 billion in 2020 and the current market price is ₹2,378,648.34
• The complete available supply of BTC is 18,760,362 BTC

Short term Prediction (2021)

• BTC coin is following a downtrend and currently is trading at ₹2,378,648.34.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 49. It is not able to give up an upside move. The current market price is below $32,175.85 and 37,127.87 moving average.
• Forecasters predict that BTC will reach ₹1792947 by the end of June 2021.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹27866 to go long.

The current price of BTC is trading below the 37,127.87 moving average, so the only buying opportunity will arise when this resistance of 37,127.87 moving average supports BTC.

However, if the market crosses the level of ₹27866 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹25438, a robust demand zone.

Long term Prediction (2022–2025)

• The Bitcoin network uses a public ledger known as “blockchain.” This ledger contains every transaction that has ever been processed, allowing a user’s computer to validate each transaction.
• The authenticity of each transaction is safeguarded by digital signatures associated with sending addresses, allowing all users complete control over sending Bitcoins from their own Bitcoin addresses.
• If the current trend continues, the cost of BTC could reach ₹4450085 by December 2022.
• BTC is also anticipated to reach ₹5394247 by 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and BTC price action for their day-to-day trades.

Ethereum(ETH)

Ethereum is an open-source decentralized blockchain system with its own cryptocurrency, Ether. ETH serves as a platform for a variety of other cryptocurrencies as well as the execution of decentralized smart contracts.

• Through the use of its ERC-20 compatibility standard, Ethereum’s blockchain can host other cryptocurrencies known as “tokens” in addition to smart contracts.
• One of the key differences between the economics of Bitcoin and Ethereum is that the latter is not deflationary, i.e. its total supply is not limited.
• ETH current market price is ₹142,440.53 with a market capitalization of $250 Billion.
• The complete available supply of ETH is 116,750,844 ETH.

Short term Prediction (2021)

• ETH coin is following a downtrend and currently is trading at ₹142,440.53.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 49. It is not able to give up an upside move. The current market price is below $1,892 and 2,066.2275 moving average.
• Forecasters predict that ETH will reach ₹10,7532 by the end of June 2021.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹13,3469 to go long.

The current price of ETH is trading below the 2,066.2275 moving average, so the only buying opportunity in Ethereum will arise when this resistance of 2,066.2275 moving average supports ETH.

However, if the market crosses the level of ₹12,4426 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹14,0272, a robust demand zone.

Long term Prediction (2022–2025)

• Staking on the Ethereum 2.0 network became possible after the Ethereum 2.0 Beacon Chain (Phase 0) went live in early December 2020.
• An Ethereum stake occurs when you deposit ETH (as a validator) on Ethereum 2.0 by sending it to a deposit contract, effectively acting as a miner and securing the network.
• If the current trend continues, the cost of ETH could reach 28,7126 by December 2022.
• ETH is also anticipated to reach 14,0679 by 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and ETH price action for their day-to-day trades.

Dogecoin(DOGE)

Dogecoin (DOGE) is a cryptocurrency that is based on the popular “Doge” Internet meme and features a Shiba Inu as its logo. Because it was based on a dog meme, Dogecoin’s creators envisioned it as a fun, lighthearted cryptocurrency with a wider appeal than the core Bitcoin audience.

• Elon Musk, CEO of Tesla, stated on several occasions on social media that Dogecoin is his favorite coin.
• The altcoin also has a 1 minute block time and an uncapped total supply, which means that there is no limit to the number of Dogecoin that can be mined. You can mine Dogecoin either alone or as part of a mining pool.
• DOGE current market price is ₹13.45 with a market capitalization of $25.089 Billion.
• The complete available supply of Doge is 130.48 Billion DOGE.

Short term Prediction (2021)

• DOGE coin is following a downtrend and currently is trading at ₹13.42.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 40. It is not able to give up an upside move. The current market price is below 20,100 and 0.000006 moving average.
• The price is moving in a very tight range of ₹12 and ₹24. Breakout can happen on either side, but analysis suggests a downside breakout.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹60 to go long.

The current price of DOGE is trading below the 200 moving average, so the only buying opportunity will arise when this resistance of 200 moving average supports DOGE.

However, if the market crosses the level of ₹60 and falls downsides, there would be good buying opportunities in DOGE because the next ultimate target would be ₹70, a robust demand zone.

Long term Prediction (2022–2025)

• Dogecoin has primarily been used on Reddit and Twitter as a tipping system to reward the creation or sharing of high-quality content.
• You can get tipped Dogecoin by joining a community that uses digital currency, or you can get it from a Dogecoin faucet.
• The price of DOGE is expected to reach ₹80 by the end of 2021, which a high level of volatility will accompany.
• Relying on the analysis, the price of ADA in 2022 could soar up to a new all-time high of ₹26120.38 and a medium price of ₹147.902545 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and DOGE price action for their day-to-day trades.

Shiba Inu(SHIB)

SHIB dubbed the “Doge killer” in reference to the former crypto Dogecoin, has experienced rapid market growth. According to analysts, SHIB is likely to reach $1, but it may take some time as it is unlikely to happen overnight.

• According to other reports, SHIB is poised for a breakout, with some analysts predicting that the price will soon double.
• The Shiba Inu coin appears to have been created solely to compete with Dogecoin. It uses the same dog that became a meme and aims to replicate Dogecoin’s success in turning a joke into a money-making machine.
• SHIB current market price is ₹0.0004893 with a market capitalization of $7 Billion.
• The complete available supply of SHIB is 400 Trillion SHIB.

Short term Prediction (2021)

• SHIB coin is following a downtrend and currently is trading at ₹0.0004893.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 30. It is not able to give up an upside move. The current market price is below 0.09321 and 12 moving average.
• Forecasters predict that the self-proclaimed doge killer will reach $0.000085 by the end of June 2021.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹1 to go long.

The current price of SHIB is trading below the 12 moving average, so the only buying opportunity will arise when this resistance of 12 moving average supports SHIB.

However, if the market crosses the level of ₹1 and falls downsides, there would be good shorting opportunities in SHIB because the next ultimate target would be ₹10, a robust demand zone.

Long term Prediction (2022–2025)

• Shiba Inu aimed to be Ethereum’s answer to Dogecoin’s Scrypt-based mining algorithm.
• Dog-meme tokens such as Shiba Inu saw transaction volumes in the hundreds of millions of dollars at the start of May 2021.
• If the current trend continues, the cost of SHIB could reach $0.0003 by January 2022.
• According to the same calculations, the coin has a very low chance of reaching $1 by 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and SHIB price action for their day-to-day trades.

Tron (TRX)

Tron is a blockchain-based decentralized platform that aims to build accessible distributed storage technology with a global digital content entertainment system and allows cost-effective and easy transmission of digital content.

• Tron network has its cryptocurrency known as Tron (TRX).
• Tron is available in India to purchase on various crypto exchanges, including BuyUCoin. Users can use it to pay for the digital content they want to gain access to.
• TRX current market price is ₹4.3 with a market capitalization of $3.97 Billion.
• The complete available supply of TRON is 71.66 Billion TRX.

TRX is ranked 22nd in the list of largest cryptocurrencies by market capitalization.

Short term Prediction (2021)

TRX coin is following a downtrend and currently is trading at ₹4.3.

• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 40. It is not able to give up an upside move. The current market price is below 20,100 and 200 moving average.
• The price is in a range of ₹6.37, and ₹5.2, which got broke, and the next ultimate support after ₹5.2 is present at ₹3.9.
• So daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹3.9 to go long.

The current price of TRX is trading below the 200 moving average, so the only buying opportunity in Tron(TRX)will arise when this resistance of 200 moving average will act as a support for TRX.

However, if the market crosses the level of ₹3.9 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹2.9, a robust demand zone.

Long term Prediction (2022–2025)

• Tron is designed for a long-term vision. Increasing digital content at a lower cost makes Tron promising and reliable crypto in the blockchain space.
• The price of TRX is expected to reach ₹12 by the end of 2021, accompanied by a high level of volatility.
• Relying on the analysis, the price of TRX is 2022 could soar to ₹74 and a medium price of ₹350 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and TRX price action for their day-to-day trades.

Ripple (XRP)

XRP is a cryptocurrency developed, issued, and managed by Ripple Labs, a private software company that invented the ripple protocol.

• XRP is a distributed ledger that can settle transactions in 3 to 5 seconds and be sent directly without an intermediary.
• Its primary purpose is to be a mediator for the exchange of currency.
• XRP is available in India to purchase on various crypto exchanges, including BuyUCoin and can be used by users to pay for digital transactions.
• The current market price of XRP is ₹45 with a market capitalization of $32.829 Billion, while its total supply is 100 billion.

XRP is ranked 6th in the list of largest cryptocurrencies by market capitalization.

Short term Prediction (2021)

• XRP coin is following a downtrend and currently is trading at ₹45.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 40. It is not able to give up an upside move. The current market price is below 20,100 and 200 moving average.
• The price is moving in a very tight range of ₹54 and ₹41. Breakout can happen on either side, but analysis suggests a downside breakout.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹39 to go long.

The current price of XRP is trading below the 200 moving average, so the only buying opportunity in Ripple will arise when this resistance of 200 moving average will act as a support for TRX.

However, if the market crosses the level of ₹39 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹27, a robust demand zone.

Long term Prediction (2022–2025)

• XRP was designed to facilitate quicker and cost-effective transactions making it a perfect fit for daily transactions.
• XRP’s can be exchanged to any other crypto with a minimal commission, making it promising and reliable.
• The price of XRP is expected to reach ₹141 by the end of 2021, which a high level of volatility will accompany.
• Relying on the analysis, the price of XRP in 2022 could soar up to ₹300 and a medium price of ₹400- ₹500 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and XRP price action for their day-to-day trades.

Cardano (ADA)

Cardano is a blockchain platform for innovators, which offers tools and technologies required for building smart contracts and creating decentralized applications and protocols. Also, the users can send and receive funds instantly with the minimum amount of fees.

• The leading cryptocurrency of Cardano is known as “ADA.”
• ADA is available to purchase on various crypto exchanges, including BuyUCoin. Users can use it to pay for digital transactions.
• The current market price of ADA is ₹90.9 with a market capitalization of $37.61 Billion, while its total supply is 45 billion.

ADA ranks 5th in the list of largest cryptocurrencies by market capitalization.

Short term Prediction (2021)

• ADA coin is following a downtrend and currently is trading at ₹90.9.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 40. It is not able to give up an upside move. The current market price is below 20,100 and 200 moving average.
• The price is moving in a very tight range of ₹89 and ₹112. Breakout can happen on either side, but analysis suggests a downside breakout.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹78 to go long.

The current price of ADA is trading below the 200 moving average, so the only buying opportunity in ADA will arise when this resistance of 200 moving average supports ADA.

However, if the market crosses the level of ₹78 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹64, a robust demand zone.

Long term Prediction (2022–2025)

• ADA is designed to create a technological platform that will bring positives changes globally.
• ADA has multiple processing layers and a proof of stake mechanism that makes it a promising and reliable crypto investment.
• The price of ADA is expected to reach ₹150 by the end of 2021, which a high level of volatility will accompany.
• Relying on the analysis, the price of ADA in 2022 could soar up to a new all-time high of ₹350 and a medium price of ₹600- ₹700 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and ADA price action for their day-to-day trades.

Polygon MATIC

Polygon is a framework and protocol to integrate Ethereum compatible blockchain networks.

• Polygon network has its cryptocurrency known as MATIC.
• MATIC is available to purchase on various crypto exchanges, including BuyUCoin. Users can use it to pay for instant payments, Decentralized Apps, or payment API.
• MATIC’s current market price is ₹61.3 with a market capitalization of $5.07 Billion.
• The current circulating supply of MATIC is 6.33 Billion.

MATIC is ranked 20th in the list of largest cryptocurrencies by market capitalization.

Short term Prediction (2021)

MATIC coin follows a downtrend after the Crypto crash in May 2021 and is currently trading at ₹61.3.

• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 40. It is not able to give up an upside move. The current market price is below 20,100 and 200 moving average.
• The price was consolidating in a tight range of ₹101 and ₹85 for an extended period and has finally given a breakout on the downside.
• The momentum and analysis favor a bearish behavior from MATIC shortly.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹40 to go long.

The current price of MATIC is trading below the 200 moving average, so the only buying opportunity in MATIC will arise when this resistance of 200 moving average will act as a support for MATIC.

However, if the market crosses the level of ₹40 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹29, a robust demand zone.

Long term Prediction (2022–2025)

• MATIC is designed for a long-term vision and has been the most profitable cryptocurrency in the past year. The fundamental and technical analysis shows enormous upside potential.
• The price of MATIC is expected to reach ₹140 by the end of 2021, accompanied by a high level of volatility.
• Relying on the analysis, the price of MATIC in 2022 could soar to ₹227 if it does not comes under supply pressure and a medium price of ₹518 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and MATIC price action for their day-to-day trades.

FORTH

Ampleforth operates AMPL, which is a stable coin. Forth is a governance token that fills the AMPL ecosystem by giving control in the hands of the community.

• Forth is a cryptocurrency powering Ampleforth
• FORTH holders are eligible to vote on proposed changes in the Ampleforth platform.
• FORTH is available to purchase on various crypto exchanges, including BuyUCoin.
• The current market price of FORTH is ₹71.76 with a market capitalization of $0.17 Billion.

FORTH is ranked 196th in the list of largest cryptocurrencies by market capitalization.

Short term Prediction (2021)

• FORTH coin is following a channel trend and currently is trading at ₹71.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading around a level of 40. It can give an upside move. The current market price is near 20,100 and 200 moving average.
• The price is moving in a very tight range of ₹74 and ₹70. Breakout can happen on either side, but analysis suggests an upside breakout with good volumes.
• Daily traders can look for good buying positions. In contrast, long-term investors shall add more quantity to their portfolio after the price gives a breakout.

The current price of FORTH is trading near the 200 moving average, so the buying opportunity will arise when this 200 moving average will act as a support.

However, if the market crosses the level of ₹70 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹64, a robust demand zone.

Long term Prediction (2022–2025)

• FORTH was launched as a stable coin that provides an elastic supply.
• FORTH has actual intrinsic value in its projects accompanied by many catalysts that make it a good choice for long-term investment.
• The price of FORTH is expected to reach ₹100 by the end of 2021. A low level of volatility will accompany it as it is a Stablecoin.
• Relying on the analysis, the price of FORTH in 2022 could soar up to ₹150 and a medium price of ₹350 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and Forth price action for their day-to-day trades.

The Internet Computer (ICP)

ICP is a crypto that allows users to creates websites, apps, and other web-based services.

• Dfinity Foundation created the leading cryptocurrency.
• ICP is available to purchase on various crypto exchanges, including BuyUCoin. Users can use it to deploy smart contracts and create multiple apps, etc.
• The current market price of ICP is ₹2470.9 with a market capitalization of $5.61 Billion.

ICP ranks 21st in the list of largest cryptocurrencies by market capitalization.

Short term Prediction (2021)

• ICP coin is following a downtrend and currently is trading at ₹2470.9.
• Focusing on technicals, the Relative Strength Index (RSI) has constantly been trading at a level of 40. It is not able to give up an upside move. The current market price is below 20,100 and 200 moving average.
• The price is moving in a downtrend and is expected to fall further.
• Daily traders can look for good shorting opportunities, whereas the long-term investors shall wait for the price to touch ₹2290 to go long.

The current price of ICP is trading below the 200 moving average, so the only buying opportunity in ICP will arise when this resistance of 200 moving average supports ICP.

However, if the market crosses the level of ₹2290 and falls downsides, there would be good shorting opportunities because the next ultimate target would be ₹2000, a robust demand zone.

Long term Prediction (2022–2025)

• ICP is designed to create a technological platform that allows users to create apps and runs on a decentralized network instead of a cloud network.
• ICP has immense potential and is backed by prominent investors.
• ICP is a new coin with almost no previous price history.
• The price of ICP is expected to reach ₹4,050 by the end of 2021, which a high level of volatility will accompany.
• Relying on the analysis, the price of ICP in 2022 could soar up to a new all-time high of ₹7,000 and a medium price of ₹12,000 by the end of 2025.

The long-term investors shall keep buying when there is a dip in the market. In contrast, the traders must heavily rely on the technical indicators actively and ICP price action for their day-to-day trades.

Inflation Surges To 5.4%: Which Assets Should I Buy to hedge inflation? was originally published in BuyUcoin Talks on Medium, where people are continuing the conversation by highlighting and responding to this story.