Investors who bought crypto assets would probably face harsh risks that can involve drastic investment losses and rising debt due to the fact the value of crypto has recently plunged.
The only question the global market has today is how to survive 2022 and remain financially fit and is it actually possible?
The market feels the squeeze, however, for those who are well-informed and warned about all the hazards, there is no better time to initiate an up-to-date reconsideration of the finances.
Is crypto just losing reputation or is it really that vulnerable?
A vulnerability the financial market faces today makes investors question cryptocurrencies’ potential as an inflation hedge, as well as generally affects their sentiments. It seems like what was considered a modern means of effective investing is failing its promise, and blockchain doesn’t really have a tangible safety harbor to offer.
Cryptocurrency is a very volatile and thus risky investment. In good times like quantitative easing, it is growing more rapidly, falling in price just as painfully and unexpectedly at any moment later. If you choose an asset not as much as an investment but rather as a means to preserve money, whether it’s a retirement vault or any other savings, it’s worth thinking about safer assets. The financial advisors, including professionals like Nassim Taleb, who forecasted the 2007-2008 recession, recommend apportioning 90% of your investing budget to safe assets and giving 10% to risky investments.
Knowing that an important question arises: are there any other blockchain-based assets that could serve as a safeguard in this situation? Spoiler: security token is the one. Let’s see why.
These assets can’t be stablecoins, as they don’t pay any interest themselves and are incredibly vulnerable if inflation comes. As governments are currently more open to printing money and accepting the fate of inflation, just keeping stablecoins is dangerous. One could make a profit from stablecoins if put in a staking program. Such programs, however, have one of two problems: if it’s good software with a sustainable economy, the yield will not be quite high (1-2%). If the software doesn’t have a sustainable economy (like Luna, which used to pay 20%), such an investment is unsafe and can be blown like a house of cards. Therefore, stablecoins do not protect from inflation and are not a good fit for long-term capital savings.
Analogously, the assets outside the cryptomarket are also bad for long-term investments. Real estate objects or private companies’ shares are illiquid outside of blockchain: it’s complicated to make an exit. Even the traditional stock market is volatile, cryptocurrency-correlated, and doesn’t protect its investors properly. Moreover, it’s impossible to use cryptocurrency while investing in traditional finance; it’s also less transparent and less encrypted, so there’s barely any value in investing in that too.
Unearth new opportunities
You are probably looking for practical answers, and here we are. Let’s assume a variety of options for the current tricky concern, and view the crisis from the point of possibility, not the problem. There is no better time to review internal financial strategies and assets operations. Perhaps now more than ever is the time to try new investment opportunities.
In 2022 only those who adapt to the contemporary reality will survive the market’s rocky situation.
Our core goal today is to find that harbor and offer effectively working solutions for investors globally.
STO is an effective instrument that can be used even without going off-blockchain as going off blockchain isn’t a remedy: untokenized assets are illiquid.
Security tokens are a better investment because are backed by a real asset and are not volatile like crypto, and allow more efficient capital raising. Stobox is a tokenization provider that assists businesses in transferring their assets to blockchain and making security tokens.\
Why are security tokens the only shield that can protect your investments today?
Much like it works in genetics, they turn out a fortunate half-blood of crypto (transparency, technological efficiency, highly liquid) and traditional stock options (backed by actual business stock or cash flows). Thanks to the latter, they keep afloat even when the crypto market is down. This is why security tokens are the main shield protecting you from the villainous landslide the crypto market is experiencing once in a while. While cryptocurrency is not backed by anything but PoW, security tokens remain a solid asset that survives market fluctuations and remains in use. All thanks to being backed by tangible assets: people will keep on living, buying or selling real estate, or develop their business (securities), just like a rare diamond or painting will appreciate too.
Provided that there’s not only a credit cycle crisis but also supply chain disruption, the assets in question will appreciate even more as they become more scarce. While the virtual world’s assets will fall in price, real-world assets appreciate. This is why such an investment is a good way not just to secure your money but also to multiply it and hedge against inflation. Consult Stobox professional team in order to get a comprehensive understanding of all the mentioned above processes. Observe the opportunities caused by the crisis.
Sound cases speak for themselves
It’s times when the overall amount of capital is reducing, companies’ evaluations are falling, accelerators like Y Combinator or funds like Sequoia are sending their startups a memo informing raising money from now on will be even more challenging, and there gotta be some cuts. With that situation in the market, having companies’ assets preserved in a safe asset is a guarantee that, in the worst-case scenario, money will not be lost. The best case, of course, suggests raising the hard cap and multiplying your business evaluation several times.
Security tokens are becoming a great alternative on the red crypto market because they are backed by real assets. STO is a disruptive instrument in the realm of finance. STO creates new business models. Tokenization opens an opportunity for business owners to make their companies available for multiple of small investments instead of seeking one primary source of capital.
STO allows the small investors to participate in the offering from $1.000 and get benefits from it.
The cryptocurrency market is in a precarious position right now. Tokenization is the most flexible and profitable way to transform your assets into securities, i.e. tokens so to get out of the crisis without major losses. Stobox is an award-winning tokenization company that provides technology and consulting to help clients leverage digital assets and tokenized securities.
What are the next steps?
Now we are in a global crisis during which the inflation rate will rise and money will depreciate. Sooner or later, it will be obvious that money is losing almost all areas of business. Therefore, right now is the time to figure out how to keep the money to preserve capital. It makes no sense to keep cash, because of rising inflation, cryptocurrency is falling, then what options do we have? You can buy bonds, they start paying a little more interest. But inflation has a big impact on them as well. So compared to all of these options, security tokens are the most adequate and comfortable alternative. Because they do not have as much downside potential as all other assets in the market and may have growth potential unlike everything else. Although cryptomarket is experiencing a severe depression today, security tokens stand still in the face of crypto winter’s blizzards. Thanks to being backed by tangible assets they represent, they currently are the best investment that could hedge against inflation and preserve your savings ― as a matter of fact, not only now but in a very, very long-term perspective.
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