Keeping Up With Inflation

Keeping Up With Inflation

[Note: I am not a professional investment advisor and this is not investment advice. It’s just my opinion.]

Inflation is making us all poorer. I’ve said it before and I’ll keep saying it. With an “official” rate at 6.2% (the real rate is likely double that), we are all losing money every day. Traditionally one way to combat the effects of inflation is through investment. When I was younger, you could have a savings account making 6-7% interest, and with 2% inflation, you’d make a little money each year. 

Now, however, with inflation likely in double digits and savings accounts yielding less than a percent of a percent return, we all are looking elsewhere to park our savings.

One popular option is stocks and bonds. However, bonds yields are terrible, making them little better than a savings account, and stocks right now are overpriced and due for a correction. Are there any other options?

If you know me, you already know what I think: cryptocurrencies. Yes, they can be incredibly volatile. Yes, they can be risky. And yes, you should never invest more than you can afford to lose. But in today’s economy, it just seems to make sense to me to at least put some savings into crypto.

The best path, in my opinion (again: not investment advice!), is to simply park some of your savings in Bitcoin and perhaps a few other top cryptocurrencies (like Ethereum) and just leave it there for years. It’s likely your rate of return will be quite satisfactory over that time frame.

However, the path may be bumpy. You may see downturns of 50% or more. So if you need to access your money during that time, you could be in trouble. Think of money put into BTC as being held in a vault you can’t access for 5-10 years.

But there is another, less bumpy, crypto option: yield-bearing stablecoins.

What is a stablecoin? It is a cryptocurrency backed by an equivalent amount of fiat currency and it is therefore always valued at $1/coin. So if you have 100 USDC (a popular stablecoin), it is always worth $100. There is a centralized trusted third-party behind every stablecoin, and you have to trust that the issuing authority really is holding equivalent funds. This is one reason I don’t use Tether (USDT), because I don’t trust that it’s really backed by equivalent dollar amounts. But I do trust other stablecoins, particularly USDC and GUSD. 

A stablecoin essentially acts like a fiat currency, but it is more efficient to use in digital transactions. So why hold stablecoins rather than just fiat? Because many institutions pay high yields if you hold stablecoins on their platforms. They do this because they are able to use your funds for crypto-lending and other financial activities.

By holding stablecoins in a yield-bearing account, one removes the typical crypto volatility from the equation, while producing some impressive returns. 

While I personally think holding BTC long-term is the best investment strategy, yield-bearing stablecoins allows one to have cash (or its equivalent) on hand, removes volatility from the equation, and still produces decent returns.

What is the risk? You are trusting your money with a third party. You already do this when you have money in the bank, but a bank is insured by the federal government. Crypto companies are not. Personally I think many such companies have matured to the point that they can be trusted, but your personal risk tolerance may say otherwise. It is possible to lose everything in one of these companies, although I think it unlikely.

Here are a few companies I use, and I feel like they are all solid companies, but of course I can’t guarantee their long-term survival (again, none of these are FDIC-insured, so if they go belly-up, you’re out of luck). 

Note: all links include my referral code (except Gemini, which seems to have discontinued their referral program), so I do get a small payment if you use the links. But so do you, so it’s win-win.

The Big Boys



Coinbase is the granddaddy of crypto services. It has been around since 2012, and it’s established itself as a safe, reliable company. The likelihood of Coinbase shuttering its doors is about the same as a standard bank at this point. If you aren’t going to hold your BTC in your own wallet (which is the best idea), then holding it at Coinbase is the next best thing.

Of course, with less risk you get less reward. Coinbase offers some yield-bearing cryptocurrencies, but their rates on stablecoins are pretty pitiful. Their best yield is on Tezos (not a stablecoin) at 4.63%, which sounds nice compared to a bank savings account, but we’ll see isn’t that great in the cryptoworld, and Tezos is volatile. Coinbase’s rates on stablecoins are less than 2%.

One additional nice feature of Coinbase is that they do offer a Debit Card, which allows you to earn rewards in Bitcoin or other cryptocurrencies, and you can spend stablecoins just as easy as cash.



Gemini is most well-known for being founded by the Winklevi twins of Facebook fame. This is another established, well-funded company that’s likely to stand the test of time.

Gemini offers much better rates than Coinbase—up to 8.05% on their stablecoin Gemini Dollar. 

The Up-and-Comers



BlockFi is one of my favorite crypto companies, and it is constantly improving its services. Currently you can earn 9% on stablecoins, which is better than Gemini and far exceeds bank rates.

BlockFI also offers a Bitcoin rewards credit card. It works like any credit card, but you receive 1.5% reward in Bitcoin (or other cryptocurrency of your choice). Not long ago I replaced my Amazon credit card for the BlockFi card, as I didn’t like my rewards being based in a “woke” company. Now my rewards are in something that can never be made woke!



Celcius is similar to BlockFi. It has rates as high as 10.2% right now. Celcius also offers some competitive rates on loans if you back them with your crypto holdings. I’m not a big fan of loans in general, but it’s nice to have the option if you need cash quickly.

Addendum: A Mobile Wallet



I want to mention one other crypto company. While not offering yield-bearing accounts, Strike is a major advancement in a practical Bitcoin wallet. It allows you to buy, sell, and spend BTC cheaply and quickly. It’s not intended as a way to hold a lot of BTC, but instead a way to transact BTC with others. As we build alternative economies, we need to start transacting in cryptocurrencies (instead of services like Paypal or GoFundMe which can shut you down), and Strike is a good way to start.


There’s no guarantee that these companies will continue to offer the rates they currently do, and not even a guarantee that they will continue to exist—there are rumblings that federal and state governments are looking to regulate them, which usually is bad news for the little guy. But in a time of zero yield savings, inflated stocks, and worthless bonds, having a way to generate some yield for your savings is a nice option to have.

Oh, and did I mention that this isn’t investment advice?