As many may know, earlier this month The Federal Reserve cut interest rates to almost zero.
The Federal Reserve manipulates the interest rate in order to control inflation and encourage consumers to move funds from savings to spending in order to stimulate the economy. This is achieved by effectively reducing the APY on traditional savings accounts which even before the Fed cut rates, were quite abysmal. According to the FDIC rates for savings hover around .08%. Yes, you read that correctly .08%!
So what does a smart crypto investor like yourself do given such an event? YOU SEEK ALTERNATIVES!
Many in the crypto community tend to dislike the idea of stablecoins, claiming they present a major obstacle to large scale crypto adoption, but if you're a long time crypto HODLR and your apetite for risk and volatility has gone south in the recent months with the major price fluctuations of BTC and the Alts, then it may be time to reconsider your strategy.
This is where the stablecoins come to your rescue. Traditionally holding stablecoins has come with the risk of missing out on growth opportunities, but that doesn't mean your crypto stash has to sit stagnant. With Crypto.com's earn feature you could be earning 10% in simple interest per year for a 3 month term with earnings paid out every week, and 12% if you're willing to stake 500 or more MCO on their platform (which at the time of writing would cost you about $2,250).
Now you may be thinking, what about the fluctuations volatility in the value of the dollar? Many traditional financial institutions such as the Bank for International Settlements (the so-called central bank for central banks), and more recently Facebook with its Libra project, protect themselves and the value of their assets but adopting a basket value approach.
The BIS does not do its accounting in any one fiat currency, but a basket of 5 fiat currencies known as Special Drawing Rights (SDR), which includes the US Dollar, The Great British Pound, The Euro, The Yen, and the Chinese Yuan. Facebook's Libra maintains its value with a similar basket approach, using the Dollar, Pound, Yen, Euro, and Singapore Dollar.
Your next question is probably "How do I personally hold a basket of multiple fiat currencies?" Well the answer to that is simple. Through a basket of both dollar, and non-dollar denominated crypto assets.
THE BASKET APPROACH
Trust Token (famous for it's TUSD) has been working hard to create and release 1:1 fiat backed crypto stablecoins for the likes of the Pound, Australian Dollar, Canadian Dollar, and Hong Kong Dollar, with a Euro backed solution expected to be released sometime in Q3 of 2020. All of these tokens are ERC20 compatible, and can be purchased directly through the Trust Token site, through a decentralized exchange like UniSwap, or through Crypto.com's mobile app (currently only TUSD,TGBP, TAUD, and TCAD are supported).
As Crypto.com continues to roll out their MCO debit card to more countries, they have begun including many of the TrustTokens alt stables as a part of their earn platform. So not only can you earn 10-12% on dollar back assets, but you can earn 10-12% on your CAD, AUD, and GBP backed Trust Token assets. Crypto.com will also list the TrueEuro solution when it is released later this year. The barriers to entry are a little high (about $250 USD in order to place your stable funds into their earn platform) but if you've got a nice crypto stash this solution could be very worthwhile.
With a basket approach on the earn platform you could maintain a solid 10% return on each of your assets, and maintain your assets value in the long run. Still worried you'll miss out on some major profit opportunities? Try adding gold to your crypto portfolio with PAXG, a gold backed stablecoin asset. With a global recession potentially on the horizon, many financial professionals are predicting a surge in the price of gold similar to that which occurred during and in the aftermath of The Great Recession.
Moreover you can invest your PAXG in Crypto.com's earn platform for a 4-6% return.
USE THIS LINK TO GET $50 ON CRYPTO.COM WHEN YOU SIGN UP
This was my first article of hopefully many for the Publish0x. Thanks for reading and I hope you liked it.
Please leave your thoughts and suggestions for improvement in the comments section.