Independent cryptocurrency analyst Delphi Digital has released its Quarterly Macro Outlook report. The investigation argues that due to slower economic growth and subdued earnings forecasts, Bitcoin is poised to outperform expectations.
In a slowed economy, investors are seeking alternatives for growth—and they just may be turning to Bitcoin (BTC). That’s the conclusion Delphi Digital came to in its new investigative report on the macro outlook for this upcoming quarter.
All forecasts point towards weaker economic growth and less potential for returns on investments moving forward. Ultimately, it is these sluggish indicators that might make Bitcoin more attractive for traditional investors in the coming year.
Reasons for Economic Slowdown
In its new report, Delphi Digital lists a few reasons why potential investors might be jumping ship and moving to Bitcoin.
- The Fed is actively pursuing a tighter monetary policy which will cap growth across the board.
- Yields on 10-year U.S. Treasury bonds are now a mere 2.5 percent in returns compared to just 3.2 percent less than six months ago. The sub-3 percent yields on bonds are already pushing many investors to ‘riskier’ investments like the stock market, which has exploded, especially in the past year.
- Because most public and private pension funds have discount rates of 7-8 percent, this is simply not enough given the new reality of sub-3 percent yields on bonds.
- Although many investors have moved into the stock market in the past year, the price appreciation they’re looking for is drying up.
- On top of all of this, the threat of a recession or significant decline in GDP is still on the table.
Given these considerations, Bitcoin seems poised to emerge as an alternative to existing investment options. This is because Bitcoin is not only a hedge against the devaluation of global currencies, but it is the ultimate hedge against underperformance when it comes to market growth.There are a few economic indicators working in Bitcoin's favor: 1) the Fed is capping growth with tighter monetary policy, 2) yields on U.S. bonds are below 2.5%, and 3) stocks are diminishing in returns. Investors are looking for… Click To Tweet
Investors are now looking for riskier assets which can provide them with sustainable growth for the long-term. Given that Bitcoin seems to be out of its most bearish rout from 2018, the leading cryptocurrency will likely look enticing for investors going into 2020.
Do you agree that sluggish economic forecasts work in Bitcoin’s favor? Let us know your thoughts in the comments below.
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