With high market uncertainty, low inflation, and negative interest rates in many countries, it’s becoming harder for investors to ignore Bitcoin, which is one of the very few investments these days to offer an alternative to further losses.
Also read: Brexit and Bitcoin and Gold…Oh My!
Bond Yields Going Negative Globally
Amid recent market turmoil following Brexit, slashing of forecasts and credit ratings, investors have been moving into safe government debt causing yield of fixed income investments in the U.S., Europe, and Japan to plummet. The more investors buy bonds, the higher the prices and the lower the yields.
Negative yields are now quite common for government bonds. According to Citigroup, Swiss government bonds with the longest maturity now have negative yields, as are almost 80% of Japanese and German government bonds. Negative-yielding sovereign debt in Italy amounts to approximately $1.6 trillion worth while the country is in a banking crisis, struggling with bad debt and non-performing loans (NPLs) worth €360 billion ($400bn).
According to Bank of America Merrill Lynch, there is currently $13 trillion of global negative-yielding debt. This is a significant increase from only $11 trillion before