• Advertise
  • Submit a Press Release
NewsBTC
Bitcoin & cryptocurrency news today, price & technical analysis
Price & Market
Cap Data from
Nomics Logo
  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • TradeeToro
  • Buy SilverTry
No Result
View All Result
  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • TradeeToro
  • Buy SilverTry
No Result
View All Result
NewsBTC
No Result
View All Result
Price & Market
Cap Data from
Nomics Logo
Home Cryptocurrency news Bitcoin

What is US Yield Curve and Why is it Tickling Bitcoin Investors?

Davit Babayan by Davit Babayan
2 years ago
in Bitcoin
Reading Time: 2min read
What is US Yield Curve and Why is it Tickling Bitcoin Investors?

What is US Yield Curve and Why is it Tickling Bitcoin Investors?

Advertisement

What if there is a way one can predict the next recession accurately? Except, there is none. But thousands of market experts, including economists, fund managers, and traders, still rely on something that help them measure the possibility of an economic crisis ahead. That something is called the US Yield Curve.

What is US Yield Curve?

US Yields represent a set of government bonds of different maturities issued by the United States government. A Yield Curve merely plots those bond yields on a graph with the Federal Reserve’s latest interest rate at one end and the 30-year Long Treasury bond at the other.

The ‘curve’ itself is ideally an upward slope drawn from left to right. On the lower end of the Slope are shorter-term Treasury Bonds, signifying that their yields are low. On the higher end of it are long-term Treasury Bonds, which have higher yields because they compensate investors for facing risks, such as inflation, for a longer timeframe. That means the so-called ‘normal curve’ would tend to rise upwards concerning the yields’ maturity.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!
yield curve, bitcoin
Examples of Yield Curves | Image Credits: ColoTrust

The difference in yields against a near or long-term maturing bond reflects an investor’s view of the US economy. A Normal Curve shows signs of a healthy financial market since investors are willing to trust their Bond for a longer time frame.

But the bells of change ring when those curves go flat. That means the difference in a short- and long-term yields are declining, and investors now expect sluggish inflation and further economic growth – it is happening right now. It is further supported by the Fed’s decision to raise the interest rate last year, which increased short-term yields and, in the process, prompted the premiums on the long-term yields to decline.

That’s a sign of an inverted slope which, from a bond investor’s point of view, is a sign of a slowdown. It means the Fed will cut interest rates (they did) and inflation will drop (it is happening).

This week, the slope inverted for the first time since 2007.

US Recession Alert and Bitcoin Evangelism

A benchmark indicator presented by the difference in 2-year and 10-year Treasury yield now stands inverted. Earlier, the spread between the two maturities had gone above 290 basis points owing to the Fed’s expansionary policies post-2008 crisis. Now flipped, the yield signals the possibility of a recession in the US. It has been able to predict many economic slowdowns since the second world war, barring one time in the 1960s. So its likelihood of being correct is higher.

That is giving bitcoin evangelists plenty of opportunities to present the cryptocurrency as a messiah asset. Gabor Gurbacs, the director of digital assets strategy at VanEck, called bitcoin a “Plan B” against the negative-yielding government bonds.

According to Deutsche Bank, 27% of bonds in the world trade at a negative interest rate with a total market value of ~$15 trillion or 75x #bitcoin’s market cap. It’s time for Plan ₿! pic.twitter.com/KrZbR4ocxl

— Gabor Gurbacs (@gaborgurbacs) August 14, 2019

A non-sovereign asset, bitcoin has a fixed-supply structure which would exhaust upon the issuance of a total of 21 million units. It allows individual investors to treat the cryptocurrency as “digital gold” – and a competition to the real gold, as well – since it is easily transferrable and carriable than the yellow metal.

No concrete evidence proves mainstream investors are hedging into bitcoin while fearing recession. But Anthony Pompliano, who heads Morgan Creek Digital Assets, is hopeful that they would.

“Bitcoin’s price could fall 50% from today’s price of $10,600 and the digital currency would still be outperforming the S&P 500 in 2019,” he said on Wednesday.

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 ? (@APompliano) August 14, 2019

Tags: bitcoinus yield curve
TweetShare17
Nexo Logo
BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner? Win up to $1,000,000 in One Spin at CryptoSlots
Davit Babayan

Davit Babayan

Davit Babayan is an Armenia-based expat balancing the academic life of a software design engineer with the experiences of a financial technology journalist. He aspires to be a full-time columnist and wants to write a book that would be called, "A Homeless Who Found Bitcoin."

Related Posts

bitcoin gold ethereum mark cuban peter schiff

Mark Cuban Slams Peter Schiff: Gold is Dead, Bitcoin and Ethereum Are Today

7 hours ago
Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin Price Outlook: Executive Sees BTC/USD At $60,000

19 hours ago
Saylor Sees Bitcoin Regulation as Greenlight For More Institution Inflows

Saylor Sees Bitcoin Regulation as Greenlight For More Institution Inflows

2 days ago
bitcoin miner btc bullish

Bullish Bitcoin Miners Cease Selling For The First Time Since 2020

2 days ago
Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin Bulls Go Ballistic On Twitter’s $1.25bn Convertible Note Offering

3 days ago
Bitcoin Bottoming Out After Its Worst Weekly Drop Since March: Analyst

Bitcoin Bottoming Out After Its Worst Weekly Drop Since March: Analyst

3 days ago

Premium Partners

Top Brokers

eToro

eToro

Review · Visit
Evolve Markets

Evolve Markets

Review · Visit
ArbiSmart

ArbiSmart

Review · Visit
PrimeXBT

PrimeXBT

Review · Visit
Moneta Markets

Moneta Markets

Review · Visit

Top Casinos

BitStarz

BitStarz

Review · Visit
mBit

mBit

Review · Visit
CryptoGames

CryptoGames

Review · Visit
Bonusfinder DE

Bonusfinder DE

Review · Visit
Bspin

Bspin

Review · Visit
Wolf Bet

Wolf Bet

Review · Visit

Top Sportsbooks

1xBit

1xBit

Review · Visit

Press Releases

Silicon Valley-Based Taraxa Wants to Put Every Informal Transaction on the Record, Unveils Details About the Upcoming Public Sale

March 4, 2021

First-Ever Public Tron-based Smart Contract

March 3, 2021

ECOMI to List OMI Tokens with BitMax

March 3, 2021

Newsletter Signup


ABOUT US

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

COMPANY

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

LINKS

Auto Trading Software ▸

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

© 2020 NewsBTC. All Rights Reserved.

  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Trade
  • Buy Silver

© 2020 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.