Bitget TradFi 101: A Practical Guide to Hedging Against Currency Devaluation and Inflation

In many regions, persistent economic uncertainty is a daily reality. The steady erosion of purchasing power from inflation, combined with the constant pressure of currency devaluation, is a major concern for users. In this environment, finding effective tools to protect your wealth against inflation is a necessity. Built on MetaTrader 5, Bitget TradFi serves as a new cross-market trading platform, enabling investors to use USDT as margin to trade a full spectrum of assets: forex, indices, gold, oil, and stock CFDs, etc. For users navigating volatile economies, it provides a powerful, all-in-one solution, especially for those focused on forex and stock indices. This article is part of the exclusive Bitget TradFi 101 series.

1. Forex or stock indices: Which is the better hedge against inflation?

Local currencies often weaken due to domestic economic policies, commodity swings, or a strong U.S. dollar, with inflation rising in tandem. To preserve wealth, investors typically turn to "hard assets" or dollar-denominated holdings.

1. The forex hedge (especially USD pairs)

● Currency pairs like EUR/USD, USD/BRL, or USD/MXN lets you directly predict on the dollar's strength against a weakening local currency.

● When you expect high local inflation and currency depreciation, going long on USD/BRL (buying dollars, selling the local currency of BRL) or USD/MXN is a direct hedge. It aims to offset the loss in your local currency's purchasing power.

● The forex market operates 24/7 with high liquidity and leverage up to 500x (supported by Bitget TradFi), making it ideal for flexible short-to-medium-term trading.

● In high-inflation environments, the U.S. dollar typically performs strongly as a "safe-haven currency." In extreme cases like Venezuela or Argentina, holding dollar assets has historically preserved wealth far better than local currency deposits.

2. The stock index hedge (focus on U.S. indices and other global indices)

● Major underlying assets include CFDs on U.S. stock indices such as the US500 (S&P 500), NAS100 (Nasdaq 100), and US30 (Dow Jones), as well as others like the AUS200.

● Over the long term, U.S. stock indices represent economic growth, with historical annualized returns averaging 7–10% (still yielding positive returns after inflation adjustments). Companies can often raise prices to keep pace with inflation, giving equities inherent inflation-resistant qualities.

● However, short-term volatility remains significant, heavily influenced by Federal Reserve policy, the tech stock cycle, and global risk appetite. In a "stagflation" scenario (inflation plus recession), the U.S. stock indices may see significant drawdowns, making the hedge less reliable than going long on the dollar directly.

3. A quick comparison

Conclusion:

● If your primary goal is to quickly and robustly protect your wealth from local currency devaluation and inflation erosion, then forex is the more suitable choice, as it reacts faster and more directly.

● If you can tolerate some volatility and wish to pursue long-term growth while hedging against inflation, then U.S. stock indices offer greater advantage, especially during periods of global economic recovery or positive tech cycles.

Many successful investors combine both, using forex for tactical short-term defense and indices for strategic medium-to-long-term allocation.

2. Bitget TradFi: The portal to both U.S. dollar and stocks

Traditionally, managing both forex markets and the U.S. stock indices required multiple accounts: a forex broker here, a stock or futures contract platform there. It was fragmented, slow, and costly due to transfers and currency conversions.

Bitget TradFi transforms this landscape:

● Unified multi-asset account: One Bitget account, one MT5 sub-account, funded with USDT as margin. Instantly access crypto, forex (EURUSD, USD/BRL, etc.), stock indices (US500, NAS100, etc.), gold, and oil. No multiple transfers, no fiat conversion hurdles.

● Real-time multi-chart monitoring: Open charts for the U.S. dollar index, EUR/USD, USD/BRL, and US 500 on the same screen in the Bitget app or MT5 terminal. Analyze correlations in real time. Typically, a stronger U.S. dollar may put pressure on U.S. stocks, though tech stocks may also rise in tandem during their own cycles.

● Maximum capital efficiency: Your USDT is your margin. The platform handles the conversion between USDT and USD seamlessly, saving time and transaction fees for you. With standard leverage available (up to 500x for forex and indices), you can implement the sophisticated allocation even with modest capital.

● 24/7 responsiveness: Cryptocurrency markets and traditional markets operate in complementary time zones. Positions can be adjusted instantly during U.S. dollar/stock volatility, significantly enhancing responsiveness to global macroeconomic shifts.

Practical tips:

1. Focus on USD/BRL or pair USD/MXN with US 500: The former hedges against local currency depreciation, while the latter captures the U.S. economic growth.

2. Increase weight on forex longs for U.S. dollar during the U.S. dollar strength cycles (Fed hawkishness or rising risk aversion).

3. Increase long positions in U.S. stock indices during the period of high risk appetite (global liquidity easing).

4. Leverage MT5's over 80 technical indicators to monitor correlations for the U.S. indices and the U.S. stock markets.

Conclusion

Bitget TradFi is a global asset management hub built for the crypto-native user. It empowers you to access to traditional markets, defend your wealth against inflation challenges, diversify assets, and participate in global growth opportunities—all without leaving the crypto ecosystem. If inflation and currency depreciation are your concerns, Bitget TradFi provides the tools to take control – access the U.S. dollar, U.S. stock and global opportunities directly with USDT.

Risk warning: This content is for reference only and does not constitute investment advice. Margin trading carries significant risk and may result in the loss of your capital. Assess your risk tolerance carefully and follow strict risk management.