Crypto vs Banking: What’s better in 2022? StormGain explains

Bitcoinist

Bitcoin News / Bitcoinist 80 Views

Let’s face it: money is on everybody’s minds these days. And there’s a lot to think about, whether you’ve invested in digital assets or not. The critics of cryptocurrency who predicted the ‘crypto winter’ are faced with the fact that financials aren’t fine for fans of fiat currency, either. Inflation is running rampant throughout the world’s major national currencies, including the US dollar, the British pound, and even the Euro, which dropped to parity with the dollar recently. The US consumer price index (CPI), a metric that measures the cost of living via a bundle of consumer goods, rose by 9.1% year-over-year in June, with the UK not far behind. But even that doesn’t tell the whole story, as oil and energy prices have far outpaced this rate, with energy costs, in particular, moving up over 40% on average.

The effect of geopolitical turmoil on ordinary people is that their traditional money just isn’t buying as much as it used to. The cost of food, heating, electricity bills and other everyday expenses is rising, and, in the vast majority of cases, wages are not rising in alignment with these increased costs. Interest rates in savings accounts don’t offer enough returns to keep up, either. Ultimately, fiat money is just worth less… money.

Even gold, the traditional inflation hedge asset, has dropped in value since the June CPI was released. But Bitcoin (BTC), on the other hand, rallied past $23K, boosting many other cryptocurrencies along with it. Although a far cry from the all-time highs of last winter, there’s still a case to be made for crypto as a better investment than banking fiat currency.

Drawbacks of banks

Even as new fintech products become popular in the market, institutional banking is still tied to a slow, physical and outdated system that favours banks over their customers. Their opening hours are awkward for working people to attend, and many still require customers to be present in person for large transactions and setting up investments. Predatory systems of administration fees and penalties further punish vulnerable savers while high net-worth individuals are offered special perks and benefits.

International transfers are also penalised, even nowadays when many families are separated as the younger generations move around in search of a liveable future. The typical banking model is just not fair or inclusive. In fact, it’s completely ill-suited to the modern, connected world.

Crypto as a replacement

 The volatility of the crypto market is the lifeblood of traders, who make their money exchanging assets during dramatic price movements. But crypto also has many qualities that make it great for savings and investments.

In fact, many advantages of cryptocurrencies address the weaknesses of current banking systems. These include:

  • Decentralisation and automation. Blockchain technology keeps cryptocurrencies completely free from the control of third parties and uses ID numbers rather than names and addresses to log transactions, eliminating the human error, bias, fraud, and interference that can cause so much frustration with banks.
  • Hedge against inflation. The dollar value of cryptocurrencies can change, of course, but the tokens themselves do not suffer inflation, as they are not under the authority of any central bank.
  • One key advantage is choice. If you live, for example, in the UK, your savings generally have to be in pounds, subject to the monetary policy of the Bank of England. But there are many different cryptocurrencies with different properties. Investing your savings in crypto allows you to pick and choose which ones to hold, letting you exercise some strategy and control and diversify to protect your investment.
  • Cryptocurrency services are automated and global, so they’re accessible anytime, from anywhere, by anyone with an internet-connected device such as a smartphone. Much better than letting banking hours and staff restrict your activity.
  • Many people know what it’s like to have a financial emergency and stress about whether the money will arrive to a friend or family member in time. Because they lack the banks’ bureaucracy and protocols, cryptocurrencies have very fast transaction speeds, making sure your money gets where it’s needed when you move it.
  • Crypto may currently be in a bear market, but as investment assets, Bitcoin and Co. perform well when you consider the bear and bull cycles. Every four years, the bull cycle drives cryptocurrencies to all-time-high prices, rewarding investors who can hodl on through the bearish times and sell at the price peaks with massive returns that no bank or stock could compete with.
  • Many crypto platforms and projects want to attract investors for the long term, so they offer incentives for people to deposit money. These usually take the form of smart contracts that ensure extremely rewarding yields for hodling crypto on the platforms over fixed periods of time. This practice is known as staking and is one of the best arguments for hodling crypto as a form of saving through an economic downturn.
Make your wallet work for profit

One popular crypto trading strategy is simply to buy and hodl, keeping the cryptocurrency in the wallet over the long term and waiting for the right time to sell. The problem is that until that time comes, the currency in the wallet is just ‘dead weight’. Even hodling can be risky, as crypto can become devalued in a bear market. As a result, the overly cautious hodler can still lose out on their investment.

The old-school way of making extra money from savings would be using a bank savings account, but banks’ interest rates are now so low (up to 1%) that make banking completely non-viable for saving.

Start your crypto savings journey

 There’s now an additional way to earn on StormGain, thanks to the introduction of the platform’s new ‘Earn Interest’ feature. Now, StormGain users can earn passive income from their holdings in StormGain wallets at a competitive 3-8% APY. Earning passive income has become even easier, all without even leaving the platform, thanks to StormGain’s trusted partner Nexo. StormGain clients will be able to earn interest on their crypto assets for 8% APY in the case of stablecoins or 3-4% for all other available crypto assets.

One important thing to note is that, with StormGain’s ‘Earn Interest’ feature, there is no mandatory lock period unlike many other crypto interest schemes where the cryptocurrency is locked (i.e. cannot be withdrawn for a period, typically 30, 60 or 90 days). With StormGain, users can withdraw at any time and without any penalty. StormGain users will earn interest on a daily basis, so any interest made right up until the day of withdrawal is kept.

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