Fluid Finance: Failing macroeconomy highlights benefits of crypto

Fluid Finance chief marketing officer Jessica Walker has said that the U.S.' failing macroeconomy highlights the advantages of crypto investment.

Due to the Federal Reserve’s monetary tightening approach to bring down inflation, the dollar strengthened significantly in the past months. This situation caused volatility in the fiat market as other major currencies were affected.

“There is a huge concern right now about the security of people’s own fiat currency, and their own country’s coin,” the CMO said. “Being able to diversify and have other options besides fiat is really important now, more than ever, with so much geopolitical uncertainty.”

Last month, the sterling hit its all-time low against the strengthening U.S. dollar. Over the year, the British currency lost about 16 percent against the greenback. Analysts believe that Britain’s high inflation and energy crisis further contribute to the situation.

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Walker also discussed the protest by Canadian truckers who refused the vaccine mandates implemented by Justin Trudeau’s administration during the COVID-19 pandemic. These protesters could not raise funds through Gofundme and had their bank accounts frozen upon an instruction from the Canadian prime minister. According to Walker, the case was an “advocate” for decentralized finance.

“This is why we need bitcoin,” Walker added. “This is why we need currencies that governments can’t control.”

The Fluid Finance executive said it was harder to use cryptocurrency to conduct “illicit” activities. She explained that transactions in decentralized finance are within the public ledger, meaning everyone can track any transaction within the crypto ecosystem. On the other hand, traditional fiat money moves from one party to another through a less transparent process.

Walker also stressed the necessity of portfolio diversification in crypto investment. She said she chose to invest in BTC, ETH and other DeFi projects she trusted.

Fed’s monetary tightening to cause issues

Several analysts have warned that the current monetary approach by the Fed could cause economic issues.

Praetorian Capital founder Harris Kupperman said that the Fed’s target to have the interest rates at 4.6 percent by next year could “blow up the Treasury.” Last week, he published a report that said that the Fed was “trapped” and would need to pivot on its strategy. Kupperman argued that the bureau must adjust to the reality of high inflation in the country.

SKwealthAcademy's J. Kim shared a similar opinion in his recent blog post. He wrote that the Fed’s consecutive rate hikes made a U.S. Treasury bond market crash “inevitable.” According to Kim, the Fed did not take measures to protect the bond market, unlike the English Central Bank.

Kim added that if the central bank went “rogue” by continuing to drive up the greenback's strength against other global currencies, the bond market in the U.S. would face illiquidity. He insisted that it could lead to “massive defaults in the USD-denominated interest rate derivative market as well.”

The Federal Reserve is expected to raise the federal funds rate (FFR) by 75 basis points in the upcoming FOMC Meeting on November 1-2, which will be the fourth consecutive time the agency takes the measure.

Data from September showed that inflation remained high, with a year-to-year increase of 8.2 percent. Food prices became the biggest contributor to the inflation rate, jumping by 13 percent compared to the same month last year. On the other hand, the job market did not concur with the Fed’s prediction, with the unemployment rate falling to 3.5 percent last month.