Relative attractiveness of bonds means less incentive to invest in bitcoin. The leading cryptocurrency is considered a zero-yielding risk asset, by some observers.
Bitcoin and Wall Street's benchmark equity index, the S&P 500, appear on track to end the third quarter lower as a key metric shows the case for owning bonds over stocks and risk assets in general, is strongest since 2009.
The top cryptocurrency by market value traded at $26,100, representing a 14% decline for the third quarter, assuming losses hold through Sept. 30. At Friday's close of $4,320.05, the S&P 500, the benchmark for risk assets worldwide, including cryptocurrencies, was down nearly 3% for the third quarter. The equity risk premium, the gap between the S&P 500’s earnings yield and the yield on the U.S. 10-year Treasury note, has declined to -0.58, the lowest since 2009, according to charting platform TradingView. The spread has averaged roughly 3.5 points since 2008. In other words, the allure of investing in stocks and other risk assets has dimmed with safe-haven government bonds offering a relatively higher return. Treasury securities are regarded as risk free, given they are backed by the United States government, which has never defaulted on its debts. The 10-year yield, therefore, is considered a benchmark risk-free rate of return against which other returns from other assets are compared. The difference between the S&P 500's dividend yield and the 10-year Treasury yield paints a similar picture. The spread has declined to -2.87, the lowest since July 2007. Juicy bond yields also mean less incentive to invest in bitcoin. Crypto propounders consider bitcoin a haven asset like digital gold, although historically, the cryptocurrency has been a
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