Since September 2019, the US Federal Reserve has printed $9 trillion. This is not only unprecedented when compared with past financial crises, but it also represents 22% of all the US dollars issued since the birth of the United States of America. In fact, the Fed printed more money in June this year alone than in the first two centuries after its founding.
The longer-term impact of today’s central bank stimulus will undoubtedly impact every industry and geography for generations to come. The question now on every asset manager and investment analyst’s mind is whether inflation will follow in the coming years.
History shows us that if the money supply increases faster than real economic output then, all else being equal, inflation will occur. If central banks print more money and the amount of valuable assets doesn’t change then the prices of those assets should go up.
The potential for higher future inflation, the uncertainty around Covid-19 and the record low interest rates that we have today have triggered a rush to gold and alternative assets – with cryptocurrencies leading the pack.
The remarkable growth in central bank easing and government debt highlights why many feel the need to store their wealth in alternative assets to avoid the potential currency depreciation that could be on the cards.
Gold has traditionally performed well during times of economic uncertainty, but market data suggests that the finite supply of bitcoin and other gold-like properties mean it’s increasingly also being viewed as a safe-haven asset. This, together with Paypal’s latest headline-grabbing announcement that it will start accepting bitcoin as a means of payment in 2021, explains the 80% surge in bitcoin since the start of the year relative to the 29% jump in the gold price.
Even more spectacular is the 215% jump in Ethereum since the start of the year, and the six-fold increase in Chainlink and Polkadot which are now in the top 10 largest cryptocurrencies. In comparison, the S&P 500 index is up 8% in 2020.
“We speak to people every day who think they’ve already missed out on crypto’s growth. This is the exact feeling I had back in 2014 when I first entered the crypto space. I suspect people will still be saying this in 2025,” says Sean Sanders, CEO and founder of Revix, which offers a safe and simple way to invest in gold and cryptocurrencies.
Revix helps individuals new to the crypto space to spread their investments across one of several low-cost diversified crypto baskets or, as they call them, ‘Bundles’ – similar in nature to ETFs (exchange-traded funds) in the stock market, but focused exclusively on cryptocurrencies.
“It’s almost impossible to predict which cryptocurrencies will be the success stories of tomorrow,” says Sanders.
“No one knows how this space will develop and that’s why we believe in a diversified approach to crypto investing.”
The rush by investors into gold and cryptocurrencies as the Covid-19 economic crisis unfolded has ignited renewed interest in cryptocurrencies which, similar to gold, are acting as a hedge against economic uncertainty.
Revix is backed by JSE-listed Sabvest, a relationship that was formed in 2018 to make crypto investing more accessible to everyday South Africans. The online investment platform offers a secure and simple way to own physical gold that has been put on a blockchain as well as a bundle of the largest cryptocurrencies for an investment of as little as R500. This is similar to purchasing a JSE Top 40 or S&P 500 ETF in that it gives investors exposure to a spread of top cryptocurrencies.
This approach, says Sanders, is ideal for those eager to move into the crypto market without having to gamble on which individual cryptocurrencies will be the long-term winners. In recent months, new cryptocurrencies such as Chainlink and Polkadot have burst into the top 10 by market capitalisation and are now included in Revix’s Top 10 Bundle.
Revix is not a cryptocurrency exchange but is rather a type of ‘neo-broker’ with no monthly subscription or account fees.
The platform automatically connects customers with access to multiple secure, liquid and reputable crypto exchanges so that they can obtain superior trade execution pricing for both buy and sell transactions.
Sanders elaborates: “We encourage customers to take a more prudent long-term approach to crypto investing. We believe people should treat crypto investing as they would any other asset class and diversify across the cryptocurrency market. We don’t want people gambling, or taking highly risky short-term bets in the crypto space – which is already a volatile market.”
Revix customers are able to withdraw or add funds to their account at any time and are assisted by a real-time customer support team.
“Banks and other investment platforms fail dismally when it comes to responding to customer queries in a friendly and timely manner. This is not acceptable and so we make a promise to all of our customers that any query will be answered within four hours,” explains Sanders.
“You can’t ignore the potential impact cryptos can have on an investment portfolio – historically, adding just a small 1% to 5% of our Top 10 Bundle to your investment portfolio would have had a remarkably positive impact on risk-adjusted returns over almost every multi-year time period on record.
“This also explains why institutional investors are now moving into this space. The increased crypto adoption and the associated surge in prices that we’re seeing paints a bullish picture for the months and years ahead.”
The crypto market is soaring again in 2020 with Revix’s Top 10 Bundle outperforming both gold and the S&P500 by quite a margin.
More on Revix’s products
Pax Gold is an asset-backed crypto commodity where investors can take legal ownership of a fraction of a physical gold bar. The physical gold is securely in Brinks vaults in London, and Pax Gold, like other digital assets, is infinitely divisible with a minimum investment of just R500.
The Top 10 Bundle is like the JSE Top 40 or S&P 500 for crypto and provides equally-weighted exposure to the top 10 cryptocurrencies, making up more than 85% of the crypto market.
The Payment Bundle provides equally-weighted exposure to the top five payment-focused cryptocurrencies including the likes of Bitcoin, XRP and Litecoin. These cryptos aim to make payments cheaper, faster and more global. This is suitable for those who believe crypto as a means of payment will eventually become universal.
The Smart Contract Bundle provides equally-weighted exposure to the top five smart contract-focused cryptocurrencies like Ethereum, EOS and Tron. Smart contracts have additional functionality built into them, to facilitate payments when certain predefined conditions are met.
Brought to you by Revix.
For more information, visit Revix.
This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing please take into consideration your level of experience and investment objectives, and seek independent financial advice if necessary.