Bitcoin-to-gold exchange Vaultoro has noted a 13% surge in gold trading in Japan, which is possibly tied to the central bank’s negative interest rates.
Vaultoro Trading Volume Surges in Japan
Plenty of countries around the world are dealing with financial turmoil, and Japan is no different in that regard. The country is dealing with negative interest rates and expected inflation, which makes investors and enterprises think twice of where to invest their money. Gold seems to be an interesting choice, but it is not that easy to obtain in large quantities for most people.
Companies such as Vaultoro, aim to make the process a lot easier using bitcoin. Buying Bitcoin in Japan has become more convenient with the recent launch of the CoinCheck exchange, among other initiatives. Since Vaultoro allows for the exchange between Bitcoin and gold – and vice versa – things are getting kind of interesting for the company.
In fact, Vaultoro trading volume in Japan has increased by 13% in March alone. Gold has always been a valuable commodity for investors, as it has been a recognized store of value since time immemorial. Consumers and enterprises are looking for ways to hedge against the projected inflation in Japan, which is good news for Vaultoro.
But they are not the only ones noting an uptrend when it comes to trading gold. One of Japan’s largest gold retailers, called Tanaka Kikinzoku Kogyo K.K. stated how the sale of gold bars increased by 35% during Q1 of 2016. This seems only natural, as it is a smart move to convert savings into gold rather than a bank account to face fleecing negative interest rates.
Japan is not the only region facing negative interest rates, though. According to the Thomson Reuters Datastream, central banks in over 24 countries have pushed rates into the red. At the same time, more countries are thinking about introducing either negative interest rates or bail-ins on retail banks. This latter scenario should be avoided at all costs, though, as it means customer savings will be used to bailout the banks before the government comes into the picture.
European Negative Interest Rates
Considering how most European countries are faced with negative interest rates as well, it comes as no surprise to find out people are flocking to gold in this region once again. Keeping in mind how the European economy is still on very wobbly legs, negative interest rates will not do anyone any favors in the long run.
The World Gold Council released a report last March, where it warned:
Unless investors are willing to accept a loss-making investment strategy, they may need to consider increasing their holdings of gold. It is also relevant for investors with limited tolerance for risk, as well as those who have increased their stocks holdings due to the low rate environment.
Whether or not this will lead to increased trading volume on the Vaultoro platform by European customers, remains to be seen. But since it has become evident for people in the Eurozone that negative interest rates could affect their savings, other alternatives are probably well worth exploring.
What are your thoughts on more people flocking to gold due to negative interest rates? Let us know in the comments below!
Source: News Tip Via Email
Images courtesy of Vaultoro, Shutterstock, Thomson Reuters