Bond yields in most Asian countries have been rising steadily recently. The rise in government-related bonds could act as a hook for many investors to stick with risk-free assets and protect their investments from volatility. However, rising yields could also reduce the risk appetite of market participants in the region and continue to put pressure on the crypto market.
Bond yields rise in Asia
Asia's high yields could exceed investment grade in the US and developed markets by 2024 due to overvalued credit risk and low interest rate risk, according to a KraneShares report. The value proposition of Asia-Pacific is currently superior to that of most high-yield bond markets worldwide. This is due to strong regional corporate and economic fundamentals that suggest recovery in multiple economies and industries, exposure to economies that could cut rates sooner than the Fed, and the nascent Chinese real estate market. This is due to the aggressive decline in 2022 due to problems. To organize myself.
The report further highlights that 60/40 investment portfolios are returning. With interest rates above 5% for the first time in nearly 20 years, investors are looking for smart and timely debt investments. As the bond market recovers, many investors flocked to investment-grade bonds in 2023, taking on duration risk in hopes that the U.S. Federal Reserve would act quickly to cut interest rates in 2024. However, the central bank did not act as such. As quickly as traders expected.
Interest in Asian cryptocurrencies plummets
Investors in Singapore and Malaysia have lost the most confidence in cryptocurrencies following the collapse of Sam Bankman Freed's crypto exchange FTX and subsequent regulatory crackdown on the asset class, according to a new survey. He is said to be one of the investors he lost. Singapore and Malaysia received a score of 4.12 out of 10 for interest in cryptocurrencies, placing them 9th and 10th in the survey. His Google searches for content related to cryptocurrencies decreased by 33% and 45% in Malaysia and Singapore, respectively. And since 2021, Singapore has seen an 82% decline in news articles about cryptocurrencies, making it the fourth largest decline.
In countries like India and China, strict government regulations make it difficult to invest in the cryptocurrency space. Although countries do not have direct rules for the cryptocurrency market, their less-than-friendly attitudes towards the world of digital assets are also evident in their governing policies.
Will Cryptomark face wrath?
Bond yields typically have an inverse relationship to the cryptocurrency market. According to Fortune magazine, real yields are positive when a bond's payoff exceeds market-based inflation expectations. Therefore, there is less incentive to profit from other assets such as cryptocurrencies, stocks, and gold.
Given the current situation in Asia, the crypto market is likely to remain on the sidelines for some time. However, future developments in the market, such as the upcoming Bitcoin halving, could allow the market to recover in the short term and gain further investor traction.
