The world is on a negative rate binge as central banks around the world are cutting interest rates, which is creating a compelling case for Bitcoin. Gone are those days, when the bank pays you for storing your wealth with them. Now, you have to pay your bank to store your money.
A German bank is now charging customers a negative interest rate to save their money. The Fuerstenfeldbruck-based Raiffeisen cooperative bank had imposed negative interest rates on savings accounts. Per the report, the bank, which is located about 30km west of Munich and has just €1.8 billion (about $1. 99 billion) in assets, will now be collecting a “depositary charge” of -0.5 per cent on instant access savings accounts, with the charge being implemented on deposits of €1 and above.
Interest Rates Lowering Across the Board
This news is alarming as German banks had agreed not to levy negative rates on depositors with less than 100,000 euros in their savings account. But, Germany is not alone. Interest rates are set below zero in Switzerland, Denmark, and even Sweden. The idea behind negative interest rates is to encourage depositors to ditch their savings and move into an investment mode. This is where some could consider Bitcoin.
The belief is that once you invest, the economy would grow, by force. But forcing savers to invest through negative yield savings account doesn’t help the banks or the economy. When deposits shrink, the central banks will be forced to provide quantitative easing to the marketplace, which invariably leads to currency devaluation and inflation.
Once the economy suffers inflation and consumer’s spending power drops, they will look for a hedge of protection. This is where Bitcoin can provide stability and protection for investors whose spending power is continually being eroded by the cluelessness of the banks.
This Is Why Bitcoin Matters
Bitcoin offers a possible oasis and calm amid the storm, with a fixed hard cap and a supply that can’t be easily manipulated like fiat currency.
It’s one of the few assets that has consistently rewarded savers and investors. With negative-yielding bonds and sluggish growth for traditional assets, Bitcoin is undoubtedly the best-performing asset of the year and sooner, not later, it’s going to be hard to ignore. As the world moves closer to negative interest rates, Bitcoin’s performance makes it an exciting alternative for savers and investors alike.
Images are courtesy of Twitter, Shutterstock.
Did you know you can trade sign-up to trade Bitcoin and many leading altcoins with a multiplier of up to 100x on a safe and secure exchange with the lowest fees — with only an email address? Well, now you do! Click here to get started on StormGain!