US citizens seemed to be taking a liking to Bitcoin and other cryptocurrencies, two recent reports suggest.
Yesterday, US bank JPMorgan said younger investors were “likely to choose Bitcoin” as an investment over gold while a report from last week stated Americans were investing their “excess” cash into cryptocurrencies.
Both developments suggest the same outcome: That cryptocurrency adoption and investment are rising in times of economic uncertainty.$2052 (+71%)#bitcoin — $1200 Stimulus Is Now Worth (@BitcoinStimulus) August 5, 2020 Low-interest rates spur Bitcoin investment
Falling interest rates are tempting some Americans to forgo safety and pour their savings into assets such as stocks and Bitcoin, noted Bloomberg. The move comes as traditional stores-of-value — such as low-interest bank accounts — are losing relevance as “risky” assets provide massive returns.
The report said it’s now “standard advice” in personal-finance subreddits and Facebook groups to keep extra cash in high-yield savings accounts. However, rates on those have fallen steadily for the past year.
Ally and Marcus — the consumer arm of Goldman Sachs Group Inc. — gave investors rates of only 1% and 1.05% in July (while DeFi projects like Yearn Finance boasted 1,000%) respectively. They have both fallen from last year’s 2% interest after the US Federal Reserve cut rates for the first time since 2008.
But means a very small gain for most investors, one that’s eaten up by the ill-effects of inflation. In contrast, assets like Bitcoin and gold gave returns of 55% and 29% this year, while Ethereum, Chainlink, and some DeFi tokens, gave a minimum of 300%.
Still, the report suggests the upside is yet not fully realized. While Americans are confident about the market, in the long run, 28% of surveyed respondents chose the stock market as their top choice for long-term investments.
Only 18% of respondents chose cash investments such as sa...