Low-yielding dollar savings accounts aren’t cutting it for Americans anymore.
A Bloomberg article claims that Americans are foregoing the safety of the dollar for more speculative assets like stocks, gold, and Bitcoin (BTC).
High saving rates, low yields
Because of the COVID-19 lockdown, the personal savings rate in the U.S. is at a historic high. The yield offered by the financial institutions on savings accounts, however, is close to zero. At the same time, assets as Bitcoin, equities, and gold, all have made double-digit gains since March. This is making them an attractive option for investors.
Source: Bloomberg.
The article mentions a 28 year-old Californian, who told the reporter that he is going to convert his $15,000 savings held in a high-yield savings account at Ally Bank into Bitcoin. He says that he is doing so because he expects long-term economic stagnation.
July was USD’s worst month in a decade
The reality is even worse than what the Bloomberg article posits. It is no secret that the dollar is rapidly depreciating against other leading fiat currencies. In fact, according to the Financial Times, July is the dollar’s worst month in a decade.
Bitcoin and U.S. Dollar Index (DXY) July 2020. Source: Trading Economics.
With another round of stimulus checks around the corner and most of the nation still affected by COVID-19 restrictions, it is possible that this problem will only get worse. Americans may likely have more depreciating fiat on their hands in the short term, and could seek to convert their holdings into higher-yielding assets. However, there is no such thing as a free lunch. In the investment world, high-return comes with high-risk.
Source: , CoinTelegraph
Articles listed with Cash Tech News as the author are either general information, or may have been imported from another website, to bring our readers a rich media experience that encompasses articles that we find interesting, as well as those curated by others.
The views and opinions expressed here are for informational purposes only, and should not be confused with professional financial advice. These opinions are solely those of the author and do not necessarily reflect the views of CashTechNews.com. Every investment and trade involves risk. You should conduct your own research, and contact your professional financial advisor before making any investment.
Corrections, feedback, and ideas should be submitted through the website contact form.