The Naira exchange rate reportedly plunged to a historic 775 to the US dollar on Friday, October 28, 2022, two days after the Central Bank of Nigeria announced the issue of redesigned N200, 500, and 1,000 notes on Wednesday.
Foreign exchange dealers in Abuja said the naira traded at N783.00 to the US dollar as of Thursday.” At the time of writing this article, the parallel market exchange rate was around N870/$, Bitget noted in a recent report.
What does this mean to me?
As the naira continues to devalue, this automatically reduces people’s purchasing power and leads to an ever-increasing inflation rate.
Now, we can attest to the spike in price due to the devaluation of the naira, as most of our essential commodities in Nigeria are imported and are affected as we spend more to acquire these products. Imagine if your budget for purchasing goods before now was $50(19,0000) at 380 per dollar in 2020; 2 years later, that same $50 is now 43,500 at 870 per dollar.
How can you hedge against inflation and save yourself from what is to come? One of the ways to go about this is through cryptocurrencies. Cryptocurrencies are digital assets with a deflationary value that maintain your purchasing power and give your money value over time as its burning mechanism enables it to have a maximum circulating supply.
Cryptocurrencies are built on the blockchain technology, which is the future of technology and solutions to major life issues.
Here are easy ways to hedge against inflation with the cryptocurrencies.
1. DCA (Dollar-cost averaging): Coins like bitcoins, and Ethereum are projected to double in the next bull cycle. DCA is the best practice if you plan on holding for Long Term to ensure your money is lost in this bearish cycle.
2. Investing in Liquidity Farming: Liquidity farming also known as yield farming, allows you to earn passive interest on your crypto investments at rates significantly higher than what you would receive from a typical savings bank.
3. Defi Staking: This is one lucrative way to save your money. Defi staking can earn you up to 100% APR on your savings.
4. Save in a cryptocurrency pegged to a dollar: Imagine if you saved 50,000 at the rate of 500/$USD by now, you would have 80,000, that’s 30,000 increments.
One way to easily save in other currencies is by using platforms that allow you to convert local currencies easily and quickly without stress. Platforms like Bitget offer a Peer-To-Peer marketplace for easy conversion of local currency to dollars to hedge against inflation. Getting Started can be done on their website at www.bitget.com
5. Copy Trading: As we all know, trading in the crypto space means taking a financial position on the price direction of individual cryptocurrencies against the dollar (in crypto/dollar pairs) or against another crypto, via crypto-to-crypto pairs.
Trading is one way you can earn a passive income. You might say not everyone can trade, but then, with Copy Trading, you don’t have to be a trader.
All you have to do is copy the trade of an expert trader, and the trader gains profits you automatically gain as well. At the moment, the most popular and the world’s leading crypto copy trading platform is Bitget.
Users of the Bitget platform can improve their trading by copying the strategies of other users on the platform without paying a fee.
Anyone can start copy trading a trader’s approach and portfolio for free by following them.
In a recent statement the company used to announce this feature, Gray Chen, the Managing Director, Bitget, said: ‘’ In the current bear market, it’s common for new crypto traders to get anxious about where their portfolio might go.
Bitget, the global derivatives exchange has fixed up a traditional trading practice with a modern outlook to solving the everlasting anxiety of “How do I manage my crypto portfolio?” with a simple one-click solution – Copy trading.’’
Explaining copy-trading and how to get started, Chen explained, ‘’In the financial markets, copy-trading is used to automatically copy positions that are open and managed by experts and professional traders.
The same concept applies to cryptocurrency markets where a user automates its trades on various assets replicating the strategies and trading patterns of the underlying portfolio of the expert.
Guidelines to Bitget’s copy trading feature can be found here: https://bitget.zendesk.com/hc/en-us/sections/8159361482905-Copy-Trade-Guideline
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