Bitcoin Forum

source here: http://www.bitcoinfuturesguide.com/bitcoin-blog/bitcoin-balances-yield-higher-return-than-german-government-bonds (http://www.bitcoinfuturesguide.com/bitcoin-blog/bitcoin-balances-yield-higher-return-than-german-government-bonds)


http://www.bitcoinfuturesguide.com/uploads/6/4/6/5/64656757/2746597_orig.png

http://www.bloomberg.com/markets/rates-bonds/government-bonds/germany (http://www.bloomberg.com/markets/rates-bonds/government-bonds/germany)

That's right, Bitcoin address balances, which yield 0%, are now earning a higher rate of return than German government bonds!

The Germans had a successful bond auction today which ended with the 2-year notes sold yielding a whopping -0.38%. That's right, NEGATIVE 0.38%. Further easing indicated by Draghi has been responsible for persistent negative interest rates in German Bunds.

https://twitter.com/dorothyier/status/666928385789181954 (https://twitter.com/dorothyier/status/666928385789181954)

We are in a new world where deflation is the big threat in global finance. Multiple countries now have negative interest rates implemented in some way at their central banks. Commodity prices have fallen so low, with oil in the $40s. This is the perfect environment for bitcoin to thrive.

As governments continue to desperately cut rates as prices decline and unemployment worsens in places like the Eurozone, Bitcoin will be a reliable store of value as there are no storage costs and even though it doesn't earn a rate of return, 0% is better than -0.5%, or -2%.

Deflation or negative interest rates don't provide a boost to bitcoin, inflation does. All this QE will come back to haunt the central banks and result in inflation in the future. The central banks might be able to obtain their objectives of having low interest rates and increasing credit offtake in the short-term, but it is a recipe for disaster in the long-term.
In any case. since the purchasing power (Or USD value) of Bitcoin varies so much, the yield doesn't really matter.