How to Invest in Cryptocurrencies to Beat Inflation?

Cryptocurrencies have become quite trustworthy in this era of inflation

Inflation is at its highest level in years. The current 7.5% consumer price index in the US is the highest inflation rate for 40 years, making many investors scramble to diversify their portfolio and hedge investments. Traditionally, the best investments to hedge funds are in real estate and gold. But cryptocurrencies are here to disrupt the trend.

Many analysts have called cryptocurrencies like Bitcoin the new 'digital gold'. This is because the world's largest crypto coin has a real-world utility that gold can't achieve in today's market. Bitcoin can be used to pay for cheap items like a cup of coffee, while also being free of government regulation and having a totally new concept of scarcity. We don't know how much gold there is in the world – but we know that Bitcoin has a limit of 21 million digital coins. Should more and more merchants adopt Bitcoin as a means of payment, the value of this cryptocurrency will far outcompete both inflation and gold.

For starters, at the beginning of 2022 gold was predicted to see its worst performance in six years. Prices at the end of December last year were down 5%. Many investors trust in gold as an asset of low volatility, but while it might not swing in price as much as Bitcoin, analysis has shown that 93% of the days in Bitcoin's short life have been profitable. The digital token doubled in value during 2021. Though its price is down about 9% from the beginning of the year there's no reason why this digital asset won't continue to increase in price.

A recent survey by CNBC showed that nearly half of millennial millionaires have at least 25% of their wealth in crypto. This represents a wider market trend towards the adoption of cryptocurrencies. Bitcoin is only 13 years old, but the wider crypto market has jumped to over $2 trillion valuations and is only increasing in use cases as functional developments increase. While gold may be the traditional answer for hedging investments to beat record inflation levels, the rise of cryptocurrencies is here to disrupt that.

A report from the Bank of America suggested that Bitcoin was still a riskier asset than gold, but noted that many individuals were nevertheless 'viewing Bitcoin as an inflation hedge'. Time and again new advancements in technology have been met with suspicion and mistrust, and time and again the new adopters have had the last laugh.

Though Bitcoin enjoys a more than 40% market share of the crypto industry, there are more than 12,000 digital tokens in circulation. Many of these are either growing faster than Bitcoin or have the potential to bring even more real-world utility. One example analysts are looking at is EverGrow Coin. This hyper deflationary token was only launched in 2021 but has attracted more than 136,000 investors due to cutting-edge innovation particularly with passive income generation.

While investing is one of the surest and safest ways to beat inflation and make money during economic downturns, few investments have been able to generate passive income without affecting any hedged funds. But EverGrow, a newly launched crypto has turned this around to pay out more than $34 million in Binance pegged US dollar rewards to coinholders. This means that stablecoins with real-world value are deposited in coinholders' accounts without them touching their investment at all.

Aside from this, the top developers and finance professionals behind EverGrow are developing a crypto and fiat-integrated social media platform – Crator – to further make digital assets accessible and useful for more and more people.

These examples show that while gold may be a traditional go-to for hedging funds when inflation is high, cryptocurrency investments are making attractive propositions for why this may soon change. Whether in Bitcoin or EverGrow Coin, crypto investments would not be a bad idea if you're thinking of diversifying funds in 2021.