The world-wide economy has been facing increasing downwards squeezing as of late that has sparked significant fear amid regular investors, and currently one historically accurate indicator is flashing warning signs of an impending recession, which could prove to be a favorable factor for Bitcoin (BTC).
Essentially, analysts are also noting that the sheer amount of global bonds that are currently trading at a negative interest rate is also justification enough for investors to abandon the traditional economic system in favor for Bitcoin and decentralized options.
Global Economy Faces Downwards Pressure, But So Does Bitcoin
Throughout the course of 2019, the equities markets have been encountering notable pressure as a result of political turmoil in the U.K. surrounding Brexit and trade tensions between the U.S. and China caused by the ongoing trade war.
Meantime, Bitcoin has observed a meteoric rise throughout the first half of 2019, going up sharply from the lower-$3,000 region to highs of $13,800.
Regardless of this, Bitcoin’s move fizzled out in late-June and the cryptocurrency has been facing increased selling pressure in the time since, which has led many analysts and investors to grow progressively bearish on BTC in the near-term.
Although Bitcoin’s bearish price action as of late has definitely thrown a wet towel over the narrative regarding BTC being inversely tied in with the traditional markets, its status as a “digital safe haven” may soon be tested, as one indicator signals that the US may be nearing a recession.
“Uh oh. The spread on the 2 year / 10 year US bonds just inverted for the first time since 2007. Really hope we aren’t headed towards a recession, but every day that is looking more likely,” Pomp, a popular cryptocurrency analyst, explained in a recent tweet.
Will Widespread Negative Bond Rates Lead Investors Towards BTC?
Even though it does remain unclear as to whether or not investors might consider Bitcoin like Gold in the course of any significant economic turbulence, some analysts are taking note that the sheer quantity of bonds offering negative interest rates is reason enough for investors to switch to a decentralized option such as Bitcoin.
Gabor Gurbacs, the director and digital asset strategist at VanEck, explained in a recent tweet that 27% of the bonds in the world offer investors a negative interest rate, which may well elucidate the fact that a paradigm shift towards Bitcoin is called for.
As the problem regarding the international economy keeps on to unravel and as investors observe to see how Bitcoin’s price acts in response to the likelihood of a global recession, it is feasible that investors will gain insight into whether or not BTC will see wide-spread adoption as a safe haven asset.
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