The high volatility of bitcoin investment is in no way discouraging investors from seeing the leading cryptocurrency as a safe alternative investment, just as buying has continued and increased strength. This has become imperative for investors as corporate-issued bonds in recent months are rising above the recession levels.
The strong appetite of investors towards buying is a powerful indication that market investors are enthusiastic about the high-risk bitcoin investment and rewards. This could also be an indication of an economy plunging towards recession, as investors have been advised to be cautious. The default rates that had been very low in the past have changed and increased.
Bitcoin investment vs bonds
As of 2019, the junk bond default rate increased to 3.3% more than the 2.4% predicted without a recession. This is its highest level attained in a space of three years. The energy bonds, which had the highest yield sector, on its own had 9.5% default, more than the 4.4% projected for the time of a stable economy.
Irrespective of the strong concern about the default rates, they do not have any significant impact on the dramatic among of refinancing that company debts are resting upon. Among junk bond insurances, the refinancing has reached its record high, as bitcoin investment companies are responding positively by turning over debts, just as the lender are equally willing to lend investors.
Investment for rewards
In the first five weeks of the year, the high-risk bonds have already been priced at a massive $50 billion, an exciting pace, as the 2019 bond issuance saw a $160 billion bond issuance in total.
However, despite the high risk involved in bitcoin trading, investors are willing to go all the way on anything that can bring a guaranteed return. Hence, with the high rate of liquidity, investors may be aligning towards bitcoin investment, irrespective of the risk involved.
