While the US stock market has been recording considerable losses despite the Federal reserve's emergency 50 basis point rate cut, investors have piled into the safe haven asset Treasuries to combat the economic impact of the deadly coronavirus (covid-19).

The two-year Treasury yield has dropped to 0.70% while the 10-year plunged for the first time ever to below 1%. Investors have fled from the risk assets as the spreading virus threatens to derail global growth. The other safe haven asset, gold, has also been rising during this time, climbing to a 7-year high.

According to Chris Rupkey, chief financial economist for MUFG Union Bank, the Fed is being too “aggressive” and responding “wrongly” to the financial markets. “We aren’t in a recession yet,” and Fed cutting rates won’t keep it from coming. He added,

“Moving between meetings with a bigger than normal interest rate cut looks like Fed officials are panicking as much as stock market investors did last week.”

Macro trader Dan Tapiero says on Twitter,

Rates are going to ZERO. 10yrs could be 50bps or less. For an institutional portfolio with mix of equity and govt bonds, your bonds will no longer act as a stabilizer/hedge and are limited in price appreciation by the zero bound. GOLD is the only liquid hedge with no price cap. https://t.co/TNNSefP5pg

— Dan Tapiero (@DTAPCAP) March 3, 2020

However, this could be good for the crypto market, bitcoin especially, as the crypto asset like gold have non-negative yields.

With the 10-year U.S. treasury yield dipping below 1%, it’s no longer just a theoretical possibility that we may be heading to negative yields territory in the United States. As #Bitcoin and #gold have non-negative yields I expect safe-haven conversations to re-emerge. https://t.co/Tfn0HzWqpk

— Gabor Gurbacs (@gaborgurbacs) March 3, 2020

Bitcoin currently is a store of value as Tapiero explains,

Thanks Adam. Tough question… to define store of value by total mkt value size and explain in few sentences. Govt bonds have 50 trillion mkt cap but will be terrible SoV in years to come. A 100m Picasso though is probably good SoV. Personal view-200 bil btc means it's SoV now.

— Dan Tapiero (@DTAPCAP) March 5, 2020

Coinbase CEO Brian Armstrong also feels,

“A down stock market and interest rate cuts may lead to growth in crypto this year. Governments around the world are likely to look to stimulate the economy in any way they can, including using quantitative easing and expanding the money supply (printing money).”

He pointed out how China has already printed $173 billion which may lead to the movement of these finds into cryptocurrencies, which,

“Are viewed as a hedge against inflation.”

“This could be the year where the mindset of institutional investors begins to shift, from crypto as a venture bet, to crypto as a reserve currency.”

However, the crypto community was quick to point out that it isn’t crypto rather bitcoin. Today, Amstrong again took to Twitter,

In conclusion: I think it's still very much up in the air which blockchain will help get crypto from ~50M users to 5B. The chain that manages to ship some of these scalability, privacy, decentralized identity, and developer tool solutions will have a big leg up.

— Brian Armstrong (@brian_armstrong) March 4, 2020

It is interesting that “the CEO of the world's most prominent Bitcoin-related company seems so skeptical of Bitcoin” said Joe Weisenthal Co-host of ‘What'd You Miss?' on Bloomberg TV.

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