Cryptocurrency
Digital Assets Are More Recession-Proof Than You Might Think
Coindesk reports, “Finding the most appropriate place to park or invest money is a subjective exercise based on the risk tolerance of an individual (or firm). But it gets even more subjective when investors begin to think about ‘return of capital’ more than ‘return on capital.’ “Many investors stay invested in stocks throughout drawdowns, believing […]
Coindesk reports, “Finding the most appropriate place to park or invest money is a subjective exercise based on the risk tolerance of an individual (or firm). But it gets even more subjective when investors begin to think about ‘return of capital’ more than ‘return on capital.’
“Many investors stay invested in stocks throughout drawdowns, believing equity investing is about long-term historical average returns and not day-to-day or year-to-year fluctuations. Plenty of other investors prefer the safety of government or corporate bonds due to their seniority and stable cash flows. Some become concerned about counterparty risk and move money out of banks and brokerages and into cash, while others fear cash and move to gold to protect against inflation or lack of trust in local government. And, of course, a small but rising group of people want to rid themselves of as many systemic risks as possible and move into bitcoin (BTC) or other digital assets.
“None of these opinions are wrong. All have some merit.
“But the different value drivers of equity, debt and digital assets may begin to manifest from the seemingly inevitable recession that will result from the current COVID-19 pandemic. All three are arguably part of the new ‘capital structure’ now, but each creates value in entirely different ways…”