Even At 0%, Bitcoin (BTC) Has A Higher Yield Than Government Bonds
Even At 0%, Bitcoin Has A Higher Yield Than Government Bonds
- BTC/USD is up 120% in 2019 till date
- May 2019 sees the highest monthly greens, more than recorded in Nov or Dec 2017
- Government tactics at loss against Bitcoin
In the year 2019, Bitcoin has been one of the best-performing assets. The leading cryptocurrency has already surged 120 percent so far leaving S&P 500, gold, oil, and government bonds far behind.
The gains registered by the world’s largest cryptocurrency has surpassed those seen in the months of last bull cycle. During 2017’s bull run, BTC surged just over 65 percent in August, about 54 percent in November, and more than 51 percent in December that are nowhere near the gains recorded in just half of the May 2019.
Currently, BTC/USD is trading at $8,161 with 24-hours gains of more than 10 percent while managing the trading volume of $3 billion, as per Messari’s Real 10, 24-hr volume.
Government Tactics At Loss against Bitcoin
In an interesting observation made by Charlie Bilello, Bitcoin beats government bonds with even 0 percent yield.
“At 0%, Bitcoin has a higher yield than government bonds in 18 countries whose central banks are attempting to debase their currencies and inflate asset prices. In unrelated news, Bitcoin is up 112% year-to-date.”
Government bonds are debt securities issued by a government to support its spending for day-to-day operations or to fund projects. These bonds are considered low-risk investments as the issuing government backs them and pays periodic interest payments called coupon payments.
As Bilello shares govt. bonds lose to Bitcoin despite debasement which is a practice to lower the value of currency and asset price inflation which is appreciating the value of financial instruments such as bonds, shares, and other capital goods.
Bitcoin Up Over 1100% Since Central Banks Initiated Negative Interest Rate Policy
One of the popular monetary policies used by central banks to spur economic growth is negative interest rates that incentivize depositors to spend cash rather than store in the bank. Central banks in Japan, Scandinavia, and Europe have implemented this policy on excess bank reserves in the financial system.
“The ECB initiated negative interest rate policy in June 2014 (5 years ago). Bitcoin is up over 1,100% since then. The BOJ initiated negative interest rate policy in January 2016. Bitcoin is up over 1,900% since then,”
Bitcoin is a clear winner when it comes to being an investment option which is fixed in supply and is inflationary in nature.