Mainstream News Trumpets Bitcoin, Gold as Global Recession Hedge
By CCN Markets: As the fear of an upcoming global recession is continuously surging, the interest in safe haven assets, like bitcoin and gold, is growing too. And now a major Australian news publication deems the two decent investments to hedge against turbulent world market.
The dreadful case of stock market selloffs & negative-yielding bonds
Last week, the US stock market had its worst day this year with the Dow Jones Industrial Average falling by 800 points in a devastating blow as a consequence of the US-China trade war.
On Thursday, Australia took a massive hit too with the Wall Street bloodbath smacking the Australian Securities Exchange (ASX) with a $63 billion selloff in its worst day in 18 months.
With the bond market experiencing an inverted yield curve – that is reportedly said as the sign of an upcoming recession –, it is worth for investors to consider alternative, safe haven investments like bitcoin and gold if the bond market fiasco continues, major Australian media outlet News.com.au reported today.
While some have argued that the current inverted yield curve isn’t necessarily the sign of an upcoming recession, the current market fiasco has resulted in $16 trillion worth of bonds yielding negative returns.
According to the news outlet – as people give the government money to expect positive returns in the end –, lending the state money to get back less money than you’ve invested makes absolutely no sense as a bond investor.
“If the last financial crisis was about a housing bubble that went haywire, the next crisis is shaping up to be a bond implosion,” the article reads.
Bitcoin and gold to fight global recession threat
Due to before mentioned signals, investors fear an upcoming global recession. According to News.com.au, investors see gold and bitcoin as safe havens to hedge against recession.
And the growing recession fears could be the reason why gold – which has been up by over 16% this year – as well as bitcoin – that has almost tripled its value since January – are surging rapidly.
“The evidence is growing that investors — rightly or wrongly — see bitcoin as a refuge in times of turbulence,” Bloomberg analyst Tim Culpan stated earlier this month.
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