The Finatical

Week of November 16th, 2021 - Cryptocurrency Tips, Surge in Inflation, Rising Home Prices

Finatic

Aditya Bagga

, and

Sidh Aneja

Nov 16, 2021

FinaticTips - 3 Tips to Learn about Cryptocurrency

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

The first blockchain-based cryptocurrency was Bitcoin, which still remains the most popular and most valuable. Today, there are thousands of alternate cryptocurrencies with various functions and specifications. Some of these are clones or forks of Bitcoin, while others are new currencies that were built from scratch. Some of the competing cryptocurrencies spawned by Bitcoin’s success, known as "altcoins," include Solana, Litecoin, Ethereum, Cardano, and EOS. By November 2021, the aggregate value of all the cryptocurrencies in existence is over $2.4 trillion—Bitcoin currently represents approximately 42% of the total value.

Automatic Purchases

If you are a frequent trader or investor in shares and bonds, you must be familiar with the term “automatic purchasing”. Automated trading systems use algorithmic trading to create buy and sell orders on the stock market or other exchanges. A computer program can be customized to specific trading strategies. It places orders based on these strategies and predetermined guidelines that are programmed within the algorithms. Building a custom system takes much more time and has higher costs; however, it provides much more flexibility and will often produce a much higher return if done correctly. The algorithm can be backtested on historical market data to see how it would have performed before and provide a more realistic performance outlook to the future. A similar trading system can be applied for the purchase and sale of cryptocurrency.

Automatic trading can allow investors to trust their gut and not second-guess themselves. Oftentimes,, traders deter from their original trading strategies and make irrational and impulsive decisions. Automatic trading prevents those investors from making such mistakes. Another benefit of automatic trading is its convenience and speed. Fast transactions can be made automatically without any hassle. However, the systems need to be checked at regular intervals to check that the automations are running as expected and there have been no unexpected failures.

Do Your Research

A major social phenomenon that drives investing is “FOMO” or “Fear of Missing Out”. This phenomenon can sometimes force us to blindly follow what others are doing and it can act as a speed bump in our path to financial independence. Therefore, before any type of investing, the first objective must be to do research!

A number of sources can provide you with sufficient information about your desired cryptocurrency platforms. Exploring social media platforms is a good place to start. Social media platforms like Twitter and Facebook have trader groups and threads that can allow you to gain insight about what other people think about certain cryptocurrencies. But, again, do not make decisions solely based on another person’s opinion. Cryptocurrency resources like

CoinMarketCal and LunarCrash can be used to gain more information about cryptocurrencies. The targeted cryptocurrency project’s website should be thoroughly examined to gain knowledge about the cryptocurrency’s motive and future plans and projects

Diversify Your Portfolio

Investing involves risk and the main tip for reducing that risk is portfolio diversification. Exactly like in the case of shares and bonds, your investment portfolio should be diversified to reduce your overall risk. You shouldn’t invest all of your financial resources in one specific cryptocurrency. You must keep other options open and spread your money out among different digital currencies. This means you don’t risk being over-exposed should one of them plummet in value – especially as the market prices of these investments are highly volatile.

FinaticTrends - 2 Financial Trends

1 - Surge in Inflation

As inflation levels reach their highest since the 1990s, it is becoming increasingly hard to believe economists who say that the current inflation is transitionary and should not be treated as a major threat. This surge in inflation has begun to show its consequences as consumer confidence hit a 10-year low last week. The plunge in sentiment happened as workers quitting their jobs hit a fresh record in a labor market that has nearly three million more positions available than there are people looking for jobs. This disappearance of workers is being called “The Great Resignation”. This fall in consumer sentiment is a direct effect of the escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation. It will be interesting to see what the government and economists have to say about this surge in inflation.

2 - Rising Home Prices

Recently, there has been a growing trend of escalating home and real estate prices. This trend has been seen ever since the beginning of the pandemic. Unfortunately, now securing a home is out-of-reach for many would-be buyers. The gap between home prices and personal income has widened during the pandemic and house affordability has become a major concern in the US. The pandemic-induced run on housing only worsened the affordability crisis for many potential home buyers, even with record-low interest rates on mortgages. Experts believe that a home’s sale price should not exceed 2.5 times your annual salary. After the pandemic caused housing prices to spike, homes now cost 5.4 times more, on average, than a typical buyer’s gross income.

Financial Guidance

“To get rich, you have to be making money while you’re asleep.” — David Bailey

If you limit your money-earning abilities to eight hours a day, you’re not going to find financial freedom. In order to build wealth, you must make money when you’re sleeping. This could mean investing in the stock market, creating a business, or earning interest on your savings in a high-yield savings account.