The financial situation in the US is evolving rapidly. Earlier this year, the US Dollar seemed to resume its bullish trend. Fast forward to today, and the Fed is inclined to introduce negative interest rates fairly soon. A lot has changed in recent months, which will force consumers to make some tough choices. A new recession can prove beneficial to Bitcoin, as well as other investment vehicles.
The Recession Looms Near
Over the past few weeks, it has become increasingly apparent financial trouble is brewing. Since the financial crisis of 2008, things had seemingly improved in most countries. Recent stock market trends show that might have all been a facade. Negative interest rates are making their presence felt all over the world. Even the United States is not safe from this trend, by the look of things. There is no reason to think US Treasury yields can’t go below zero. It is not a situation to look forward to.
In recent months, interest rates have fallen below zero in numerous regions. Europe, Japan, and other regions have introduced these rates as a last resort. Central banks are currently in the negative to prime domestic economies. Forcing investors to pay for parking funds and then giving them less money back is not a suitable solution. A solution needs to be found, yet that is much easier said than done.
Spread Your Investments
By actively introducing negative interest rates, central banks are taking a major risk. Rather than focusing on banks, they force consumers and spenders to invest in riskier assets. Although numerous options exist in this regard, it is a desperate measure to kickstart the local economy. Stocks, corporate bonds, and similar investment vehicles all fall into the “riskier” category.
By providing funds to mid-sized companies through these vehicles, the central banks hope to make these companies spend more money. That funds would go toward employees, equipment, and so forth. It creates a positive cycle for the domestic economy. That is, assuming these measures will effectively work. This approach can easily lead to people diversifying assets into markets not controlled by the central bank. In fact, some of these assets won’t boost the domestic economy at all.
Positive News for Bitcoin and Bullion?
When times get tough, the diversification of assets becomes the main objective. Since there are only risky options available in traditional finance, there is no reason not to explore other options. Bitcoin can see a hefty influx of new money in this regard. It is still one of the best-performing assets year-round, despite the recent crypto winter of 2018. In terms of potentially making money, Bitcoin seems to give better odds compared to stocks and bonds.
Another alternative option to explore comes in the form of bullion. Both gold and silver prices are on a tear as of late. Gold even noted a six-year all-time high this week, further confirming consumers and companies are looking at alternative markets. Gold prices rose by nearly 15% in the past six months, which is a prominent sign. The price of silver also noted a hefty 8.7% increase over the past six months. Now is the time to look into alternative investment opportunities, for rather obvious reasons.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.