Many people and investors have always been preaching that bitcoin is the best way to protect your money from inflation. However, recent price developments have shown that this is not always the case. As inflation continues to rise, Bitcoin drops well below $ 30,000, bringing the entire industry with it.
In fact, two cryptocurrencies are better options for protection against demonetization: LBLOCK and DEFC. In this article we want to explain why Bitcoin is not currently suitable as an inflation hedge and why the mentioned signals may be worthwhile for interested investors.
Bitcoin drops to USD 27,600, with another sale to come
Let’s first look at the current price development. After peaking at about $ 65,000 about half a year ago in November 2021, the price of bitcoin dropped to below $ 40,000 within a few weeks and then continued in a real downward curve. Many investors may have expected a crucial bottom at $ 30,000.
However, after breaking this boundary several times, things look bleak. BTC has reached its lowest rate for the year and is heading towards the psychologically important $ 20,000 mark. True support zones can no longer be found. In fact, there could be more selling movements that could take the largest cryptocurrency to $ 10,000 and less.
Why Recent Price Actions Suggest Bitcoin May Not Be the Best Option for Inflation Protection
When we talk about inflation protection, we must first look at what really happens to inflation. Simply put, value for money is declining. This is because more units are being put into circulation, which devalues every single unit.
– heise online (@heiseonline) June 12, 2022
To protect an asset from inflation, its price must rise at the same rate or even faster than the general price level. Only then can you be sure that your purchasing power will not erode over time.
This does not seem to be the case at present with Bitcoin. The BTC / EUR exchange rate has been volatile, falling consistently for half a year and is now around 30 per cent below the November peak. From this perspective, investing in bitcoin is not currently the best way to protect against inflation.
Risk vs. limited availability of BTC tokens
The value of Bitcoin stems greatly from its perceived scarcity. There are only 21 million BTC tokens and the supply is slowly being reduced by mining rewards going to miners who confirm transactions on the blockchain.
This deflationary property has been touted as one of the main advantages of Bitcoin, as it is said to lead to increased demand and a corresponding rise in price. However, this view ignores the significant volatility of the cryptocurrency.
While the supply of Bitcoin may be limited, there is no limit to the amount that can be traded on exchanges as there is too much liquidity for this.
As a result, bitcoin prices can fluctuate rapidly and investors can incur significant losses in a short time. Therefore, the limited availability of BTC tokens is not a guarantee of stability and investors should be aware of the risks before investing. However, many young investors barely recognize this risk when buying their coins. Then, when prices fall, fear increases and the inexperience of crypto fans puts them out of the market.
So what are the best alternatives for investors?
The LBLOCK project is currently working on developing a decentralized lottery based on the BNB Network. The aim is to create a platform that offers low fares, high speed and great security and transparency while paying for jackpots. Signal holders should be able to participate in crypto gaming every day.
But why is Lucky Block an effective protection against inflation? Very easily. It does not require a large investment to participate in the drawings. Even one LBLOCK coin, currently worth tenths of a cent, gives you free access to all lottery rounds.
Investors who dare to package higher can also take advantage of an interesting form of betting, as some of each jackpot goes to LBLOCK holders.
The DEFC protocol, on the other hand, focuses on developing a modern and inexpensive DeFi swap platform. By creating a decentralized infrastructure, the team wants to enable returns to be generated in a more secure and efficient way with a community approach than is currently possible with centralized solutions or alternative crypto models.
So this focus comes on stacking and yield farming with huge APYs. The level of publicity does not seem to have reached the base yet. You have to put 20 cents on the table right now. If the base increases in the near future, the result should be able to exceed the current rate of inflation.
So there you have it! Here are two alternative cryptocurrencies that offer better inflation protection than Bitcoin. While BTC prices can be volatile, LBLOCK and DEFC offer stability and exciting prospects.
How to buy LBLOCK and DEFC tokens
Step 1: Go to the website
The best way is to purchase LBLOCK and DEFC signals directly through their respective websites. While a wide range of digital assets are not given here, one is allowed to get the coins at low fees and in an user – friendly environment.
Step 2: Attach a wallet
A wallet like Metamask is a prerequisite for getting the tokens. Once you have one set up, you can connect it to the respective platform and use it to purchase LBLOCK and DEFC signals.
Step 3: Buy tokens
Existing crypto assets, especially BNB, can now be exchanged for the desired currency. It is now also possible to use fiat currencies to buy the coins. The minimum deposit is 30 US dollars.