Global government bonds, which show negative interest yields, have climbed to their highest level in history. It stands at $17.05 trillion, $50 billion more than last year’s all-time record.
The new record stems mainly from the extremely loose monetary policy of the world’s major central banks, which reacted forcefully and quickly to the coming of the economic crisis triggered by the coronavirus pandemic. Thus, national governments can borrow money at exceptionally low-interest rates.
Such a development plays into the hands of cryptocurrencies. Investors are looking more for more profitable assets than government bonds. Thus, the demand for Bitcoin and other digital currencies is growing, which translates into an increase in their price. Bitcoin firmed more than five percent on Monday. Over the past five weeks, its market price has risen by nearly sixty percent.
And the United States is just ahead of the approval of another fiscal package to support the American economy. It is therefore likely that the established trend will continue for some time to come, which could result in a further strengthening not only of Bitcoin but also of other cryptocurrencies.