How I Would Invest $1000 in Cryptocurrency in 2021 | Best Cryptocurrency to Buy in 2021?
“Investing in cryptocurrency will help hedge inflation,” – CTO CEX.IO
It is better to keep money in investment baskets
Bitcoin is able to hedge inflation
Some investors are ready to invest in cryptocurrency
A decrease in the Central Bank’s interest rate will immediately lead to a drop in the yield of deposits. In fact, it will be unprofitable for Russians to keep money in banks, but there is no point in keeping it at home “under the pillow” either: high inflation rates can devalue the Russian ruble in just a few months. Investing in cryptocurrencies can become an alternative tool. How close this topic is to Russians and whether the residents of the Russian Federation are ready to invest in bitcoin and other currencies today, BeInCrypto asked Dmitry Volkov, the technical director of the CEX.IO crypto exchange
– How the reduction in rates on bank deposits in Russia will affect the interest in cryptocurrencies?
D.V .: Today, the decline in rates on bank deposits leads to the fact that investors are beginning to look for alternative sources of income.
This is due to the fact that along with the decrease in rates, world banks are pouring cheap money into the economy. Some of them have already settled on stock markets, which have overheated significantly over the past few weeks. Some investors consider the crypto market, in particular, investments in bitcoin, as a hedge of inflation. This event did not pass by the Russian players, who have already paid attention to bitcoin and other still undervalued assets. So, on the CEX.IO crypto exchange, the trading turnover for the BTC / RUB pair in June increased more than 3 times compared to January of this year.
The main assets on the crypto market, such as bitcoin, ripple, froze in place in anticipation of demand and growth drivers. Technically, the demand will be generated by the transition of investors from stock and commodity markets to the crypto market. A possible jump in major digital assets is indicated by the movement of Ethereum, which has risen sharply above $ 240.
– What cryptocurrencies will Russians invest in??
D.V .: Most likely, they will invest in the bulk in bitcoin, since this is the most famous cryptocurrency among people far from cryptocurrencies. In addition, bitcoin has shown itself well during crises compared to other cryptocurrencies, confirming its reliability.
More experienced users, of which there are not so many, are likely to diversify their cryptocurrency portfolio, but the majority will most likely be Bitcoin..
As for staking, those who are familiar with it have already become disillusioned with it, because the income from it is generated as a result of the “inflation” of the cryptocurrency, and you can only benefit from this if the need for this cryptocurrency grows faster than the pledged one into it inflation. In this case, the investor will have to make a choice in which cryptocurrency staking to invest. In other words, choose the cryptocurrency, the demand for which will grow in the near future. This choice is similar to choosing a cryptocurrency to invest in, the price of which is expected to rise. There are certain risks in this.
The outlook for ETH 2.0 is positive, I think there will be many investors. But the future of the move to 2.0 is not clear yet, as well as how this will affect the price of ETH after the launch. Therefore, in my opinion, in the near future it will be a risky investment, and for people for whom the goal is to preserve savings, and not speculate on the price, such risky investments are not suitable.
– How interesting are cryptocurrencies to Russian investors in the current economic realities?
D.V .: Russian investors are hardly different from foreign participants in financial markets. As you know, it is best to keep money in several baskets, that is, use the principle of diversification. Today, investors do not have much choice where to invest their money: the stock market and precious metals are overheated.
We see an increase in the interest of Russian investors in cryptocurrencies. As I already said, on the CEX.IO crypto exchange, the trading turnover for the BTC / RUB pair in May has increased more than 3 times since the beginning of 2020. The trade turnover for all traders from Russia has grown almost 6 times, the amount of deposits of users from Russia – 4 times.
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