Cryptocurrency can protect you from currency depreciation

US fund manager Horizon Kinetics, which has three funds in its top ten active equity funds for 2021, has successfully protected its investors from the devastating effects of a fall in the exchange rate and rising inflation. 

According to an article published in the UK today, Horizon Kinetics is a $ 7 billion company run by three employees: Murray Stahl, Stephen Bregman and Peter Doyle, according to the Financial Times. According To Doyle: 

“There is no return after the pandemic and there is a worldwide debt problem, which means a default or a currency decline,” he said.,” 

The huge pressure on the currency over the past few years has contributed to a sharp rise in debt levels over the previous decade. This encouraged investors outside the financial system to seek hedges to protect them from the resulting inflation. 

According to Horizon Kinetics, the best hedging is often a mix of commodities, real estate, cryptocurrencies and companies with well-structured business models. 

Specifically, on cryptocurrencies, Doyle says,”people should have access to the asset class.” He goes on to explain that bitcoin is experiencing shortages due to its limited supply, which is in stark contrast to what is happening to the fiat currency, which is losing significantly in value as it is increasingly displaced. 

Horizon Kinetics allocated 1% of its portfolio to bitcoin through the Grayscale bitcoin trust in 2016. Since then, allocations have risen to 10% of Paradigm funds. 

 

The other two separate Horizon Kinetics ‘ top ten ranked funds kinetic and corporate restructuring with 56.6% and a small Kinetics capitalization of 58.75%, according to Morningstar. 

DISCLAIMER: This article is for informational purposes only. It is not recommended or intended for use as legal, tax, investment, financial or other advice. 

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