Probably every forex trader knows the most important hard fiats in the world:

US Dollar (USD), British Pound (GBP), Euro (EUR), Swiss Franc (CHF) and Japanese Yen (YEN)

There are minor hard fiats: Canadian Dollar (CAD), Australian Dollar (AUD) and Chinese Yuan (CNY).

I know that most of you will probably telling me, forget fiat and get into Bitcoin because Bitcoin will become much more expensive. I am definitely sure about it but on the long run; there still maybe a volatility in different ways in the following weeks.

Now a lot of traders use stable coins, or fiat to trade Bitcoin, Ethereum, Binance Coin, Bitcoin Cash, Litecoin and other cryptos.

However most of the people hold USDT – Tether in stable coins. We personally consider a little risky this because of the following fact:

1. There are still certain concerns regarding to ban of stable coin
2. There have been certain rumors that US Dollar may lose its value because of different factors such as higher inflation (some people talk about hyperinflation) or unsustainable debt.

There are a lot of people currently who don’t want to trade cryptos, they sold them and plan to get back after market starts to become green on long term bases. Meanwhile they sit on other fiats.

Why Swiss Franc?

Let’s suppose you have a diversified portfolio, you have cryptos, stocks, gold and one part of your fiat.

There are several reasons why we recommend to add Swiss Francs into your fiat portfolio:

1) Switzerland is a small country. It’s one of the democracies which has prevailed over centuries. The advantage of Switzerland above other countries is its neutrality. Swiss don’t go to war and won’t go there; investors in time of turnmoil look for stable and neutral ground.

2) Compare the debt ratio vs GDP of other countries vs Switzerland.

I was unable to find the exact number for 2021, but it was around 42% in 2020. This is a very strong indicator which signals a good fiscal balance of that country and measures of their internal control.

Just compare the numbers of other countries such as: Greece, Japan, Portugal, Italy, US, Canada and UK.

In case of Greece, Japan and Portugal – these numbers are above or close to 200% of GDP.

US and Italy are over 135%. Canada, UK, France and Spain are above 110%.

Basically if the debt is above 80% it is very hard to manage it. Over 100%, it means that you owe more than you have.

Few people today are pointing at this fact, but there are like ticking bombs and sooner or later, somewhere we may see its consequences.

This is something that happened already in European Union when Greek debt crisis exploded in 2011. Now Greece is a small country, however it had an impact on other countries of EU and it caused higher contribution on behalf of other countries such as Germany, France, Holland and UK, and it was also a cause of Brexit because British people didn't like the idea to send their resources to save Greece.

So Switzerland is a real winner as you can see. These numbers are strong facts.

3) During the peak of Covid’s financial crisis, Swiss Franc was the only fiat which was increasing against USD.

British Pound was at 1.18 at its lows, and Euro around 1.07 USD per 1 Eur. Today’s exchange rates favor euro and pound. However during each crisis, investors tend to fly toward USD.

Meanwhile Swiss Franc in the worst days of that crisis became much stronger than other currencies.

4) Another stock market bubble has been created.

Once again stock market is overinflated and it’s only a matter of few weeks when someone pinches the bubble. Stock market declines are still having major dominant effect on predicting future behavior of economy of  any determined country.

Stocks of many companies are way too much appreciated; but does it really reflect the value of each company?

5) Will investors fly to USD again or will they try to dump USD?

There may be a lot of point of views. We cannot affirm any outcome. It’s like 50-50 in this case.

However one of the most endagered hard fiat besides USD is Euro because of the fact that their third and fourth economy are having really bad time regarding to its debt levels.

6) Shall I have only Bitcoin and cryptos for this outcome?

Holding crypto on the long run may be a good profitable strategy, however during the following months there still maybe higher volatility and increased possibility of larger dips. We estimate this increased volatility at least for August and September of this year.

However if during stock market plunge, a bottom is reached, it may become also a strong bottom for Bitcoin and other crypto currencies and signal a beginning of another bull market cycle where Bitcoin will probably overpass the record highs of April 2021.

7) What will be the bottom for Bitcoin during this cycle?

There are a lot of arguments about this point of view. Some people think that we reached it, so it was around 28 K, some were arguing about the level of 20 K.

We extend it to the range between 6,000 and 28,000 USD per Bitcoin. We calculated this level using factor of 90% decrease from its all time highs. However we really don’t know where the support is located. 28,000 is the best scenario because it has already been reached few weeks ago, however we also point that there may be another decline due to possible stock market plunge because stocks are strongly correlated with the price of Bitcoin.

8) Swiss Franc may appreciate again more vs other pairs.

Due to the aforementioned facts, there is a strong probability that CHF may worth more that it does now.

At this moment you pay 0.93 Eur per 1 CHF; and 0.905 USD per 1 CHF and 1.26 CHF for 1 British Pound.

Today it reminds me the levels of 2002, when Euro was below parity. It was around 0.83 USD per Euro aprox. 20 years ago. And Euro reached its parity with USD in 2003, during that year USD came up to level of 1.2 USD per 1 EUR in less than 3 months.

I personally wouldn’t be surprised if Swiss Franc would came to parity with Euro in few weeks and there is also a certain probability that it may worth more than Euro. I personally say this just because of the fact that the internal crisis in key Eurozone countries such as Italy and Spain is unsustainable and sooner or later we may see big problems in one of these countries; I am not talking about Greece and Portugal which are even in worse shape but they aren’t that important due to the size of their economies.

Due to the fact that British Pound reached its low vs Swiss Franc in 2020 at 1.14; we dare to increase the probability that both currencies may reach a parity in 2022.

Today many people speculate with the fact that US dollar may worth much less against other currencies, but what if investors fly toward US dollars instead of other hard fiats? This is only a supposition but it happened during other economic crisis, so there may be also a possibility that Euro and USD may hit parity after 2 decades.

Everybody recognizes the fact that strong euro wasn’t the best thing that happened to countries of European Union, actually it crippled the  economic growth of EU together with the factor their strong overregulation.

Europeans are fans of strong laws, however their internal laws are affecting negatively the growth of the block and they have also caused the exit of United Kingdom out of EU. European Union has become much weaker without Britain after Brexit.

9) If I trade crypto, where can I get Swiss Francs?

     First of all, there are digital Swiss Francs. In case you are sitting on stable coins, instead of sitting them, you can also exchange them for real Swiss Francs on Uphold for example.

On Uphold, you have gold, silver, cryptos, and many fiats. I personally have been using this app for buying cryptos. The minimum amount to get is 50 USD. The only disadvantage are higher commissions on Uphold than on other market places.

10) Diversification is the key.

If you have portfolio of many assets and you hold some fiat ratio, including Swiss Francs may become a step which will strengthen your portfolio value and may it strengthen against many undesirable effects.

If you want to monitor the evolution of your portfolio, you can keep a track on a spreadsheet for example on Excel and adjust your investment strategies.