The U.S. economy is on the path to a speedy recovery from the damaging recession it was faced with in the early months of the coronavirus pandemic. One reason we have to thank for this recovery is government spending on Treasury and mortgage securities. Of course, this highly active spending period led to high risk-taking across the market. Cryptocurrency was one of the biggest beneficiaries of this risk-taking by far. But what happens when this risk-taking cools down? Investors hedge their investments. And one way crypto investors are hedging their digital currency buys is with BarnBridge (CCC:BOND-USD). The BarnBridge crypto promises portfolio stability, even in a volatile asset class.
So, what’s behind the BarnBridge crypto, and how does it function? Here’s everything you need to know.
BarnBridge Crypto: Is BOND the Real Deal for Crypto Hedging?
- BarnBridge is an ERC-20 token based on the Ethereum (CCC:ETH-USD) network.
- The token, according to the developers’ white paper, is the product of investors’ increasing risk-taking.
- Developers call BarnBridge the first tokenized risk protocol on the crypto market. The goal with the crypto is to offer varying degrees of market risk in a tokenized form, such that any investor can profit off of their preferred investing style.
- As the Federal Reserve looks toward tapering down on government spending, this risk-taking across the market will cool. BarnBridge’s BOND token is a crypto-oriented solution to hedging against market volatility.
- By tokenizing yield and debt derivatives, investors can flatten the risks of price volatility in the crypto market, which is notorious for its price fluctuations and sensitivity.
- On the flip side of the digital coin, aggressive investors can buy higher risk derivatives for accelerated profits.
- The network allows for this varied investing through crypto bonds. Users can stake BOND tokens in different “tranches” of various risk. These tranches take a proportional cut of profits or suffer proportional losses when the asset they are staked to moves in value.
- The network is also launching a decentralized autonomous organization (DAO). This will allow BOND owners voting rights on community issues like future upgrades.
- The BOND token is available for purchase right now. The token has support from some of the largest exchange platforms, like Coinbase (NASDAQ:COIN), Binance (CCC:BNB-USD), Uniswap (CCC:UNI-USD) and Gemini.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.