Responsible savers are taking the time to further their options during these times of uncertainty. If you’re like most people, you’re still relying on fiat savings as your primary way to generate long-term wealth. Unfortunately, the centralized nature of the traditional financial system makes achieving financial freedom nearly impossible without seeking out alternatives.
Thankfully, there have been a lot of developments in the financial world. The introduction of blockchain assets has added another way for the average person to store and create wealth. Here is everything you need to know about surviving this recession and how to prosper.
What is a Recession?
A recession can be described as two consecutive quarters of economic loss. When a recession occurs it can have a major effect on all aspects of the economy. There have been many recessions over the last 50 years with some spanning the entire globe. Each recession has reshaped the global economic stage and resulted in everything from additional regulations to new risk management strategies and requirements.
Risks Posed by Recessions
There are a lot of reasons why a recession can be a major issue for savers. For one, recessions are times when borrowers are more likely to default. The more defaults and the higher the risk of major financial institutions failing. These actions can have a domino effect that jeopardizes the stability of the entire global economy.
Business failures, foreclosures, and bankruptcies all increase during a recession. The main reasons for their increase are the sudden decline in employment and the rise in inflation. When these combinations of factors are found, the average person will find their wealth drained directly from their account.
Inflation is a loss of buying power in a currency. Currently, the USD is amid 40-year high inflation. As such, it costs more to buy everyday products and services compared to this time a few years prior. Inflation destroys savings as it decimates the saver’s future buying power. High interest is another one of the most common side effects that inflation causes.
Is This a Recession?
There has been a steady debate about the current state of the economy. Much of this discussion revolves around the fact that there isn’t a 100% way to determine a recession. In this instance, some factors seem to signal recession such as inflation.
However, there are other indicators such as rising house prices and employment. The uniqueness of this particular scenario can be attributed to the global pandemic that left the economic machines on pause for years. It turned out that stopping the global logistic system was much easier than restarting it. As such, there have been added costs added to many of the products you use daily.
What Are the Best Options to Generate Wealth in a Recession
Unlike previous generations, you now have many options to improve your results during the recession. The introduction of decentralized blockchain assets changes the game. These unique digital assets can be created to serve any role.
Some projects act as cryptocurrencies, utility tokens, collectibles, stablecoins, and much more. The diversified nature of this industry makes it ideal for certain tasks. There are now many blockchain assets designed to store and create wealth. These projects tackle one of the most important concerns you should have – inflation.
Avoid Inflation
It doesn’t make sense to save an asset that declines in value over time. Consequently, fiat savers are beginning to seek out other ways to store wealth. Inflation can wreak havoc on savers which causes people to not meet their financial responsibilities.
Inflation raises the price of daily goods which can result in people not being able to hit their budget. These actions drive defaults and foreclosures which adds to the momentum driving the recession. In response, the FED will raise interest rates to lower consumer demand which should help to reduce prices
Sadly, these actions don’t always have the intended effect. There are many times when these decisions led to further recession and a worsening of the economic situation. These situations highlight just how vulnerable the current system is to bad monetary policies.
Recession Proof Industries
Another key step you should take in your preparations is learning about recession-proof industries. Traditionally, there have been certain industries that have done well during times of
recession. These industries include health care, child care, financial services, and daily needs like grocery stores, auto repair, and pharmacies.
Supply chain and delivery businesses have prospered in the past as people travel less during recessions. Since people are spending more time at home it makes sense that home hardware stores see a boost in activity during recessions.
Understanding what businesses fare better during a recession can help you to be more prepared. Those with an entrepreneurial mindset will find this information helpful when determining the best avenue to move forward with during recessions.
DeFi Improves Your Odds
Another vital component of your recession wealth generation plan should be to include DeFi (decentralized finance) services into your approach. These systems are decentralized which means that there is no group to edit or censor your actions.
The decentralized nature of DeFi protocols means that they are easier to join and open to a global audience. These protocols eliminate the high expenses of traditional financial systems and improve the ROIs received by users.
Today’s advanced DeFi networks are all about passive returns and storing wealth. The DeFI movement continues to meld into new opportunities. Anyone can now secure low-risk passive income using these advanced features.
Diversify Your Savings
There is no one-size-fits-all when determining the best way to generate wealth. Each person needs to evaluate their scenario and what resources they have at their disposal to determine the most effective way to achieve their financial goal.
The more you understand about inflationary-resistant assets and businesses, the better suited you are to avoid unnecessary losses. Every saver should look into blockchain assets as a way to supplement their current strategy.
Safehaven Tokens
Safehaven tokens are cryptocurrencies that were built to act as a long-term store of value instruments. They often include special protections to help prevent whale manipulation and more. These advanced DeFi tokens are the culmination of 14 years of crypto development.
Safehaven tokens offer the advantages of stablecoins. They leverage reserves to prevent fluctuations in price. The best projects leverage self-appreciating reserves which means the token gains value over time alongside its reserves.
The META 1 Coin is a prime example of a safehaven token that leverages a self-appreciating reserve. The developers behind the project decided to use a basket of gold-related assets as reserves. This structure improved stability and gave the token many of the advantages of gold.
META 1 Coin has seen a steady value increase since its launch. The token was put to the test during the last market corrections. META 1 Coin outperformed many of the top coins in the market. It secured 1.35% in value while major projects lost 60% from their all-time highs.
Stability
One of the main advantages of META 1 Coin is the added protection that enables it to remain stable. The token has anti-whale manipulation protocols built into its core coding. For example, only humans can participate in the METANOMICs DeFI ecosystem.
Eliminating trading firms and corporations lower the trading volume and reduces volatility. These two steps help long-term savers who want to see steady value increases over time. META 1 Coin was designed to generate value slowly over time and keep it.
The token has a built-in asset value protection mechanism. This system works by comparing trade values with asset values. Only those trades above asset value gain network approval. This structure prevents network dumps which would lower the value of the token and hurt long-term hodlers.
Keep the Community Fair and Balanced
One of the biggest threats to any DeFi network is whales emerging from the community. META 1 Coin helps to prevent this risk through the integration of a token limit. Every META 1 Coin wallet is set to a max $5M in token value. This limit prevents whale manipulation from users.
Leverage DeFi Services to Create Passive Income
DeFi networks have earned a reputation as a smart way for the average person to secure passive income. These networks include a host of features that enable anyone to use their tokens to generate rewards. Notably, these protocols have evolved from simple systems into advanced networks that cater to a large selection of users.
Integrating DeFi Into Your Saving Strategy is Easier than You Think
You can add a DeFi network to your saving strategy with ease. This scenario wasn’t always the case. The first DeFi networks were confusing because they required you to hold the network token to join and conduct transactions.
Today’s networks have direct fiat-to-crypto conversion capabilities. The METANOMICs DeFi network uses the Onramper portal to provide these services. This system supports the conversion of +50 fiat currencies into crypto tokens.
The Top DEFI Features
The top defi features to seek out today are staking, farming, lending, and NFTs. These options operate differently but are found across multiple networks currently. Among these options, staking is the most popular.
Staking protocols reward you for providing liquidity to smart contracts called pools. Farming is similar to staking but there are no preset APYs. Consequently, farmers can move their tokens from pool to pool to find the highest ROIs.
What Factors Could Accelerate the Recession?
Many factors could cause the economy to slide into a recession. Supply chain shocks are one of the biggest risks. As the world slides into a more polarized state, it’s becoming more difficult to access certain resources.
In the past, stock market crashes and bad monetary policies have been major factors that have led to economic downturns. Whenever there is financial abuse such as was the case in the housing market crash, a recession is usually quick to follow.
Another factor to consider is the general psychology of the average person. If people are worried about the future, they are less likely to spend money. Additionally, there needs to be faith in the currency. When the population loses faith in a currency, it can spell economic disaster shortly thereafter.
What Factors Could Reverse the Recession
Some factors could help to reduce the chances of the economy sliding deeper into recession. One of the first steps everyone can do which could help to prevent recession is to startup an Emergency Fund and start living within your means. Adding new debt is one of the worst things you can do during a recession.
Another great strategy is to diversify your holdings and seek out additional income. Adding passive income to your saving strategy is the best way to gain revenue without increasing your workload.
Support Next-Generation Blockchain Assets
One of the best things that people can do at this moment is to support assets that are designed for their benefit. Even Bitcoin, the world’s first cryptocurrency, acts as an excellent store of value option for the market.
When people support these assets it sends a powerful message to the centralized financial system. It lets them know that people won’t stand around and get abused forever. The entire creation of cryptocurrencies is the result of people seeking a better way to achieve financial freedom. Today’s cryptocurrencies act as standalone assets that improve your saving potential compared to fiat options.
Recessions Come and Go – But You Can Remain on Top
Recessions are a necessary part of economic growth. When you study their history, multiple recessions have had resounding effects on the market. Even this current recession is unique in many aspects. The savvy saver leverages all the tools at their disposal to prepare and endure during tough economic times. Remember, it’s your savings and your financial future. As such, it’s your responsibility.