The Aussie dollar’s falling - conside r this now…

Sunday, 1 August 2021 — Albert Park

[2 min read]

Dear Reader,

In our just-published how-to guide, we show you how to use stablecoins to get increased yield from the crypto ecosystem.

We lay out the easiest beginner strategy for you, consisting of three parts.

These are rates of interest that blow the banks out of the water.

How is it possible?

It’s simply when borrowers and lenders come together using decentralised platforms to agree on a ‘price’ for money — the interest rate.

That interest rate varies according to supply (depositors of stablecoins) and demand (those who want to borrow stablecoins).

It’s the perfect free market system with no central bank in sight!

And you’ll find an entry-level way to get started, laid out in full, here.

But that’s not why I’m writing this special
Sunday edition of The Rum Rebellion

Instead, I wanted to point out a different use case for stablecoins you can think about as an Aussie investor.

You see, most stablecoins are priced in US dollars.

Which means as Aussies they can also be a good way to hedge some currency risk on your overall portfolio of investments.

Let’s face it, like me, probably most of your investments are priced in AUD.
Which is fine when the economy is booming, as usually the Aussie dollar is too.

The AUD at its heart is a commodity-based currency, so we ride boom times based on demand for our mining resources.

But what about when global growth is slowing?

Anyone who’s been around long enough knows the mining industry is cyclical.

And when the good times turn, the value of the Aussie dollar falls too.

Now check out the current chart:

The price of the Aussie dollar is looking pretty weak.

It recently broke to a six-month low.

Is this a harbinger for tougher economic times ahead?

Maybe…

I don’t have a firm opinion either way, but isn’t it interesting how you can use clues from currency markets to see several layers deeper than the stock market alone?

But my main point today is to show you how I use the stablecoin income strategies we lay out for you here to add some USD exposure to my overall investment portfolio. While at the same time generating yield from ‘crypto dollars’.

So how’s the strategy going for me?

My experience so far

As I’ve mentioned previously, I myself have invested six figures into this three-part strategy.

To date (since around March/April when I started testing this strategy), it’s returned an average of 10.4% pa in yield, but also about 5.4% in currency appreciation because the AUD has fallen against the USD.

So, I’ve made some nice gains from a comparatively safer strategy, despite the immense volatility elsewhere in crypto.

Of course, things can go the other way too, when the AUD is rising in value against the USD.

But as a small part of your overall portfolio mix, I think the combination of yield and currency hedging is very interesting — and timely — idea for you to consider.

Click here for the full strategy.

Regards,

Ryan Dinse,
Editor, New Money Investor