The Bitmex research team is advising clients to hedge their portfolios against inflation with safe-haven assets like gold, bonds and bitcoin. The advice is coming on the heels of the various world governments giving cash stimulus to citizens, to boost their economies from the slump experienced as a result of the COVID-19 pandemic.
A lot of citizens have been applauding their governments for giving out stimulus packages in cash/bank transfers. While these measures provide temporary relief, the long term inflationary effect is lurking around the corners. As more money is injected into the system, without corresponding productive activities to match demand, prices will increase consequently.
So why is the BitMEX research team suggesting gold, bitcoins and bonds as hedging instruments now?
The BitMEX research team had recommended using derivatives like call and put options on ETF, especially when the markets are moving into a volatile period. This advice may have worked in other times, but the recent crisis in the financial market due to the pandemic seemed to have rendered this advice impractical. The team advise that it would be more cost-effective for investors to buy bitcoin, gold or bonds to hedge their portfolio than to use the "volatility-related bets" previously advocated.
It also seems that some Americans are thinking in the direction of the Bitmex research team, as Coinbase reported last month that there was a significant increase bitcoin purchase, the same day stimulus package was paid.
Source: Cryptonews
