• 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
  • Gamble +Try
  • Play GamesTry
  • BUY BITCOINTry
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
  • Gamble +Try
  • Play GamesTry
  • BUY BITCOINTry
No Result
View All Result
NewsBTC
No Result
View All Result
Price & Market
Cap Data from
Nomics Logo
Home Cryptocurrency news

Bullish For Crypto: Ex-IMF Economist Calls For Negative Interest Rates

Samuel Wan by Samuel Wan
9 months ago
in Cryptocurrency news
Reading Time: 3min read
Bullish For Crypto: Ex-IMF Economist Calls For Negative Interest Rates
Advertisement
Listen to Article

Former IMF Chief Economist, Kenneth Rogoff states central banks should consider negative interest rates. His words, in effect, greenlight crypto assets, which stand to benefit should the Federal Reserve decide to go this route.

Crypto Assets Could see a Boom off the Back of Negative Rates

As central banks run out of options to stimulate their respective economies, talk of negative interest rates is starting to make the rounds.

Negative interest rates punish savers and reward borrowers, an entirely unconventional and backward concept. With that, the cryptocurrency market should gain, as savers look elsewhere for better deals.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

All the same, Rogoff makes the claim that should a rapid recovery fail to happen, negative rates make sense from the perspective of lessening the damage.

The argument put forward claims that between government-backed stimulus and negative interest rates, the latter works more conventionally. Thus, making it the preferred option.

“If done correctly – and recent empirical evidence increasingly supports this – negative rates would operate similarly to normal monetary policy, boosting aggregate demand and raising employment.”

He then goes on to say making this policy effective would require discouraging largescale cash hoarding. This he also applies to entities and industries known to be big hoarders of cash, including pension funds and insurance companies.

“With large-scale cash hoarding taken off the table, the issue of pass-through of negative rates to bank depositors – the most sensible concern – would be eliminated.”

However, at present, crypto interest rates can be up to 8.6% for savers. As well as that, passive gains are also possible through crypto asset staking. According to stakingrewards.com, this can be as high as 38%. Or 15% for more established projects such as Icon.

cryptocurrency savers can get up to 8.6%
Source: blockfi.com

As such, it makes little financial sense for savers to stay in fiat. And should the Fed implement negative rates, it’s entirely plausible that mass inflows into the crypto space would result.

Sweden’s Experiment Still Divides Opinion

Not only are negative interest rates an unconventional policy, but in the grand scheme of economic theory, they are a relatively recent phenomenon too.

Sweden’s central bank was the first to use a negative rate. In July 2009, Riksbank cut its overnight deposit to -0.25%.

This was followed by the ECB in June 2014, when it lowered its deposit rate to -0.1%. Since then, the ECB deposit rate has sunk further, currently, it’s at -0.5%.

cryptocurrencies stand to benefit from negative interest rates
ECB interest rates for the last 9 years. (Source: ecb.europe.eu)

However, in February 2015, Sweden reverted back to negative rates once more. The Riksbank chose to do so not to stimulate the economy, which grew 4.4% that year but to counter the risk of deflation.

The end of 2019 saw an end to this, as Riksbank reverted back to 0%. Five months on, economists remain divided as to whether it was a success, or not.

Chief Economist at think tank OMFIF, Danae Kyriakopoulou remains skeptical. He pointed out that negative rates did not achieve the central banks’ inflation target. What’s more, the knock-on effects, such as keeping asset prices inflated, only work to prop up a false economy.

Photo by rupixen.com on Unsplash

Tags: crypto
TweetShare12
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
Samuel Wan

Samuel Wan

Samuel Wan is passionate about different cultures and eating good food. He has years of experience working in business and finance — a burgeoning interest in Bitcoin and cryptocurrencies since 2017. UK based.

Related Posts

3 Things Bitcoin Traders Should Watch in FOMC’s First Meeting of 2021

3 Things Bitcoin Traders Should Watch in FOMC’s First Meeting of 2021

1 hour ago
Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Trouble for Bitcoin as 3 On-Chain Indicators Point to Potential Sell-Offs

23 hours ago
Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Severe Liquidity Shock Ahead for Bitcoin Market, Warns JPMorgan

1 day ago
regulations

Crypto Exchanges: Slow Shift to Classic Financial Industry Regulations?

1 day ago
defi

11 DeFi Projects Rumored to Be Airdropping Tokens

2 days ago
Nimbus: The Next Big Thing in DeFi

Nimbus: The Next Big Thing in DeFi

2 days ago

Premium Partners

Top Brokers

eToro

eToro

Review · Visit
Changelly

Changelly

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
CryptoSlots

CryptoSlots

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

Helio Lending Pivots into Becoming a CeFi Aggregator

January 27, 2021

Coinbase Custody to Support Dvision Network (DVI)

January 26, 2021

A New Year – New Opportunities in Crypto

January 26, 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
  • Gamble +
  • Play Games
  • BUY BITCOIN

© 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.