Volatility ahead! How to hedge against macro uncertainty.



Mar 17, 2022


At the time of writing on 16th March Bitcoin is just under $39,600 USD and Ethereum $2,600 USD. So not too much has happened since last week. Bitcoin is up around 2% in the last seven days, and it looks like we've established a price range, with the mid $40,000s as the top and the mid to low $30,000s as the bottom. 

For now, the market is waiting to choose a direction. Looking at the ‘Crypto Fear and Greed Index’, we're back at extreme fear, which is where it’s been for most of the year. So the theme for today is given the macro uncertainty and the likelihood of volatility, how can we hedge against that? 

Hedging and the wealth builder perspective

The long-term perspective is 5 to 10 years - that's what we mean by the wealth builder perspective. But to have that you do have to hold your crypto, you do have to weather some volatility along the way. That's just how these markets work. So with that in mind, it could be another very volatile year ahead - considering the pandemic and its impact on the global supply chain - and inflation. Inflation is up all over the world. Everyone's purchasing power is dropping and all businesses are being affected by the cost of raw materials rising rapidly.

Elon Musk commented this week that he thinks USD consumer inflation will continue to near all-time highs, asset inflation will run at double the rate of consumer inflation, and the flight of capital from cash debt and value stocks to scarce properties like Bitcoin will intensify. But he went on to say that he thinks it’s better to own physical things like a home or stock in companies, rather than dollars when inflation is high.

The third factor is of course the war in Ukraine. So it means we're likely to see volatility that's going to affect prices in all markets. So what do you do? You adopt a hedging strategy of course! Traditionally, the store of value and hedge against macro uncertainty and inflation is gold. 

Gold is back!

This month Gold hit an all-time high at a little bit over $2,000 USD per ounce, then dropped back about 2% in the last day or so. But overall gold is up 12% on a year ago, which is better than having money in the bank. 

But it's pretty tame compared to crypto. But that's okay. Because we're talking about hedging. The further you get out on the risk asset curve, the risk jumps exponentially. So with gold, you might not get rich overnight, but it's going to protect your wealth, which is what gold is supposed to do. 

If you want to buy gold, silver or platinum as a hedge, Dacxi has the best way to do it. Using the same blockchain technology used to create cryptocurrencies, Dacxi has tokenized precious metals, allowing buyers to own the rights to the underlying physical metals on the exchange at the Dacxi Wealth Platform. You can either buy the metal individually or a part of a Dacxi Bundle. 

The Precious Metals Bundle is a world-leading solution for crypto wealth diversification and protection. Basically, it's a curated portfolio of digital precious metals representing gold, silver, and platinum. The metal itself is stored and insured by ABC Bullion, one of the world’s leading bullion companies.

Gold and silver have of course been the basis for currencies for thousands of years, but platinum is a newer arrival. Platinum is highly valued due to its special properties which give it many and varied industrial and technical uses. Only a few 100 tonnes are mined each year so it’s scarce too.

On the Dacxi Wealth Platform, you can buy, store, and sell precious metals just like regular crypto assets. Check out the Dacxi Precious Metals Bundle in more detail here.