Fear of inflation is increasing among many investors. Many trillions of euros and US dollars will flow into the markets in the next few months. But which asset class is best suited to protect yourself against inflation?
Even if the extent of the corona pandemic is still unclear, we already know today that the global economy will fall into a recession. This crash has ramifications for all asset classes. Inflation as a reaction from central banks is becoming increasingly likely. In the sales panic in mid-March, all assets, including gold, plummeted. Even after the panic, the question arises as to where to invest your saved money and where necessary to switch. The asset class that reacted the least was – unsurprisingly, the real estate industry.
When illiquidity doesn’t just have disadvantages
When it comes to selling panic, Bitcoin is a bad asset for those who are slow to react. No matter when the shock hits the exchanges, cryptocurrencies are traded 24/7 and can be liquidated immediately. When in doubt, cryptocurrencies are therefore the first asset to be sold, ergo, before any other asset class. The high liquidity and fungibility of Bitcoin can prove to be a disadvantage in such situations.