BusinessDay

Rethinking safe haven assets and building resilient portfolios

As a newbie, it is easy to feel overwhelmed, as it is with most things in life, and this is especially true in such a volatile market as the world of cryptocurrencies.

Regardless of the uncertainties and concerns, the world of cryptocurrency has the potential to have a significant impact on anyone’s financial stability.

Read also: 5 Popular Cryptocurrencies in Nigeria

While government bonds, treasury bills, and other forms of fixed-income investments are undeniably considered as safe-haven investments due to low risk, but with inflation on the increase, the question arises how safe is money locked up for a specific period of time?

As a result, it is important to build a strong portfolio capable of managing risks, reducing volatility, and providing diversification across many unrelated assets while delivering consistent returns and adapting to changing market conditions.

Enter the world of stablecoins. A cryptocurrency asset with lower volatility that is tied to a cryptocurrency, or exchange-traded commodity (such as precious metals or industrial metals).

Most stablecoins are also pegged to the US dollar as they are an easy way to get exposure to the crypto space without having to worry about volatility.

When compared to other types of cryptocurrency assets such as bitcoin or altcoins, the benefits of stablecoins are that they are stabilized by assets that vary outside of the cryptocurrency sector, i.e. their prices are tied to real-world assets.

Stablecoins can help you establish a robust portfolio by providing a solid basis for your investment portfolio. This is required to offer a cushion when markets are volatile or things go wrong.

You can be confident in your portfolio as an investor if you have investments that can endure the test of time amidst Inflationary pressures and volatile market conditions.

If you’re a fund manager looking to get exposure to the crypto space through stablecoins, send an email to hello@xend.finance and someone would be in touch with you.

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