Recession Fears are Back in Full Force as 30-Year Treasury Bonds Hit a Historic Low, Is Bitcoin Really the Plan B

    • Investors clamour to the safety of government bonds, yields take a hit
    • There is an increased risk of recession
    • Too early for BTC to act as a safe haven?
    • The yield on the 30-year Treasury bond, which moves inversely to price, went below 2% at 1.941% for the first time ever as investors flock to the safety of US government bonds.

    On August 16, the 10-year Treasury notes hit a 3-year low of 1.475% while 2-year Treasury yield was 1.467%, the lowest level since October 2017.

    This historic drop in the long term US bond yield comes shortly after the interest rates on 10-year and 2-year Treasuries inverted. The inversion has previously been a reliable indicator of economic recessions.

    “The 30-year yield in itself is historic given that it is moving to massive lows but the curve inversion is typically the signal, one of the better signals you can get, that there is an increased risk of recession,” said Bank of America technical strategist Stephen Suttmeier.

    US 30-year Treasury bond drops below 2% for the first time in the history

    As a result, stocks plunged with the Dow Jones Industrial Average having its worst performance of 2019 and the fourth-largest point drop (800.49 points) of all time.

    However, Dow future jumped 250 points on Friday after China and Europe announced plans for additional stimulus to lift their economies.

    Debt to Fund Deficit

    Meanwhile, a surge in US borrowing in the global debt markets is starting to create concern as Treasury is expected to ramp up the issuance of notes, bonds, and bills to fund the soaring $1 trillion budget deficit.

    This deluge of Treasury issues has Wall Street worried about whether there’s enough liquidity in the system to meet the supply.

    Gaurav Saroliya, director of macro strategy at Oxford Economics says US dollar liquidity is deteriorating and “reaching a point where it may require drastic action if measures aren’t taken to address it soon.”

    Recession Fears Are Back

    Chaos is ensuing in the global market as worries grew about the US-China trade war, uncertainty over Brexit and geopolitical tension. Meanwhile, central banks are racing to the bottom with rate cuts.

    Now with the yield curve inversion, investors are disturbed as such a bond market move has signaled every US recession in the past 50 years.

    “The countdown to a recession has just started,” said Hussein Sayed, the chief market strategist at FXTM, a currency trading platform.

    Moreover, Hedge fund titan Ray Dalio said he won’t rule out China weaponizing US Treasury holdings. It’s scary what these countries can do to each other and what that would mean for the world economy, he added.

    What Does It Mean For Bitcoin?

    It’s hard to say how will Bitcoin fair during the ongoing and upcoming contentious times.

    Bitcoin is just a decade old and hasn't experienced a recession yet. Just last month, it went through its first Fed rate cut.

    As we saw in the last 10 years, while in some situations Bitcoin acted as a safe haven like earlier this month, other times, it failed to act like one as we saw last week.

    Recently, VC investor Tim Draper who doubled down on his prediction that Bitcoin will hit $250,000 said investors will have to wait a little longer than planned to see it being used as a safe haven asset.

    It’s still too early to say if Bitcoin will be used as a hedge against the shaky economic scenario and upcoming recession.

    However, a deflationary and decentralized crypto-asset surely holds potential.

    Bitcoin (BTC) Live Price

    1 BTC/USD =$8,845.8168 change ~ -3.58%

    Coin Market Cap

    $161.35 Billion

    24 Hour Volume

    $8.6 Billion

    24 Hour VWAP

    $8.91 K

    24 Hour Change


    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    AnTy has been involved in the crypto space full-time for over a year now. Before his blockchain beginnings, he worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


    Please enter your comment!
    Please enter your name here


    Live Bitcoin Price & Latest BTC Charts

    Today's Latest Crypto News

    Ethereum (ETH) Price Analysis (February 27)

    • Ethereum greatly follows the downward trend pattern as price is now falling towards the support level. • Bearish scenario is playing out in the...

    Compound Protocol Moves Towards Decentralization With COMP Governance Token Launch

    Compound users will now wield the power to propose and vote for changes to be implemented on the platform. This aligns with their...

    Stellar (XLM) Price Analysis (February 26)

    Key Highlights XLM/USD price worth has been relatively declining in sequential order. The XLM/USD pair has hit a low value of $0.06000. Caution needs...

    21Shares' Short Bitcoin ETP (SBTC) Listed on German Stock Exchange, Boerse Stuttgart

    On February 25, Boerse Stuttgart, the second-largest stock exchange in Germany, announced it had begun listing exchange-traded products (ETP) that are inversed with the...

    Bitcoin (BTC) Price Analysis (February 26)

    Key Highlights BTC/USD market has fallen under selling pressure after a line of range movements. One of the vital bearish restraining points at $9,000...

    Malta Financial Services Authority Addresses The Challenges With Security Token Offerings

    On Tuesday, Malta's Financial Services Authority (MFSA) published a document providing answers to questions relating to security token offerings (STOs) in the country. The watchdog...

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.