NIGERIA’S INFLATION RATE HITS 13.71% — WHY YOU SHOULD CONSIDER CRYPTOCURRENCY AS A HEDGE TO YOUR FINANCE
Still considering why you should invest into cryptocurrency?
Robert Kiyosaki of the Rich Dad Poor Dad is known for his position that “savers are losers”.
One simple way to understand his position is considering how inflation affects your money saved in the bank.
Your Naira saved in the bank or elsewhere is at the risk of losing value over time under the circumstances of inflation and Naira devaluation against the US Dollar.
According to the Consumer Price Index report released by the National Bureau of Statistics, Nigeria’s inflation rate rose by 13.71% (year-on-year) in September which is the highest following August inflation rate of 13.22%.
The implication of the high inflation rate is that the purchasing power of Naira is consistently and rapidly declining. One million Naira saved in the bank a year ago has lost its purchasing power over the year under inflation.
It is even worse for low income earners with low purchasing power.
Ideally, the notion of money as a medium of exchange for goods and services rendered is supposed to serve as a store of value. However, this has been a major deficiency for the Naira currency.
Cryptocurrencies like bitcoin have limited supply which makes them a better store of value for investors.
For the records, they can only be 21 million bitcoin in circulation but quite impossible to have a fixed supply for the Naira currency which is printed yearly into the economy.
The huge impact of blockchain technology and cryptocurrency in the new digital economy, especially our finance has not only changed the way we know money to be but also how we use, spend and save money as a store of value.
Traditional investors acquire Gold or Silver to hedge their funds against inflation as a store of value. But in recent times, with the emergence of cryptocurrency, bitcoin has been proven to be a better store of value in the past decade.
This means that investing your money in a digital asset like bitcoin can provide a hedge on your funds against inflation and also yield returns.
