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This is a great question, and very important to understand how to prepare for the eventual upcoming recession. In a recession, I believe most people agree that in the long term cryptocurrencies will go up in relation to fiat currencies. This leads to high inflation, fiat goes down in value making crypto going up in price, but not necessarily in value versus gold for example , that will depend on crypto widespread adoption and instituti This leads to high inflation, fiat goes down in value making crypto going up in price, but not necessarily in value versus gold for example , that will depend on crypto widespread adoption and institutional investment.
The problem is what is going to happen in the short term, once the recession kicks in. Crypto is regarded as a high risk investment, this type of assets are the first to suffer investment retraction in a recession. When fear settles in, there is no confidence in the market to allocate funds to high risk investments so they fall. Money will seek refuge in gold and silver. However, it is very important to understand that the crypto market right now is being held by the enthusiasts, the Hodlers.
So it might be that the crypto market will be able to hold these levels, proving to be a safe place to protect the funds in alternative to precious metals. Thus, transitioning crypto from a high risk asset to an edge asset, which would of course be very bullish for crypto. Another thing to consider is how fast the recession will play out. Will it be a slow descent or a sharp one? Will it be volatile or not? All these will play a role in messing with human factor in trading. Also, it is important when will this recession truly arrive.
It would be nice if regulation and gateways for crypto institutional investment were already ongoing before the recession. Anyway, it is hard to say how it will go but I am sure it will be energetic. Some of cryptocurrencies major use cases currently are as a store of wealth, and as an alternative to fiat currency. It is highly resistant to inflation, as the exact number of bitcoin is predetermined. If a global recession were to occur, you would likely see MANY forms of investment take large hits.
Real estate debt is higher now than in You can bet real estate is going to fall in a global recession. Stocks will fall as well as the global economy stumbles. Gold will rise as it always does during chaotic ec Gold will rise as it always does during chaotic economic times.
Even fiat currency such as the dollar will be affected by mass inflation as central banks print money to pull the economy out of a stall.
The price of all crypto right now is still mostly speculative. This is demonstrated by the massive bubbles the crypto space continues to experience.
As a result, they have educated themselves on cryptocurrency and perhaps even purchased small amounts. If a global recession were to transpire, and stocks, real estate, and even fiat is losing its value? Additionally, Bitcoin and crypto in general has another thing going for it. These people have seen huge amounts of volatility, and have not been shaken loose. I doubt global recession would loosen their grip.
If fiat currencies experience turmoil, it is more likely to enforce in them the belief that crypto is a superior form of currency vs. Will they see it as a refuge, a virtual gold to move their money into to avoid the crashing economy? Or will it be viewed as too risky an investment and be sold off in a panic? Those who are holding now are unlikely to panic sell, they are early adopters and believe crypto is a burgeoning future technology. Crypto has no value unless the population or a large enough portion of it agrees it does.
Many still carry a lot of ill will towards banks and government from the debacle. If another similar crash were to come to pass within the next 5—10 years? Let me start by talking about the hierarchy of money.
Whether we want it or not, we are still, to some extend, on a gold standard schema banks have to have reserves at the Central Banks. This is why when a crisis hits or volatility starts to increase , the price of g This is why when a crisis hits or volatility starts to increase , the price of gold goes up refuge.
So the question is to know if a cryptocurrency is implicitly backed by gold or not. The same mechanisms and effects would apply. If the cryptocurrency is not implicitly backed by gold, it would mean that this is the ultimate money the highest level of hierarchy. It requires a really strong level of confidence. Which is why i would eliminate that possibility. Cryptocurrencies would have to find their place within the hierarchy. One interesting feature is the ledger blockchain , which brings openness, transparency, security and speed.
It has some limitations. Cryptocurrencies relies on the internet and computing power to mine. Attacks are more likely to come from the cyber space and we could definitely imagine some scenario where those currencies would be at risk. The HUGE advantage that i would see is that cryptocurrencies travel faster and without borders. If a recession happens in one country or one region, i would expect to see the cryptocurrency act as a refuge easier to transfer capital.
I would also expect that to happen in case of a global crisis the intensity of the crisis will not be equally distributed. Another factor is that cryptocurrencies are, for now, a micro-niche. I will keep thinking about it and update my answer later.
This depends on what part of the market we are looking at. The ICO part would be hugly impacted by a recession. With less cash to turn to coin sales would fall flat unless the seller wants another coin. Trading would not be hugly impacted, however there would be less buys. For those cashing out of the market they would successfully do so early on but the market would quickly dry up the current pegged coin USDt. This however would be new economic territory as coins are not currency, and they are different from other investments.
It could all go s It could all go south and everyone abandons the market if prices collapsed. The coin exchange is not like the stock exchange, it has very few regulations. There is nothing to protect your investment. There are a lot of plausible scenarios. One big distinction is between hard times that lead to international economic bickering and financial repression, and slow growth that leads to economic liberalization and global cooperation. Both types of recessions have occurred in the past.
If each country tries to fix things on its own—with tariffs and bailouts and military aggressiveness and middle class subsidies—then crypto would likely boom. But if there is more global cooperation, crypto would lose much of its value as an alternative to traditional financial solutions, and the poor economy wou But if there is more global cooperation, crypto would lose much of its value as an alternative to traditional financial solutions, and the poor economy would starve resources for long-term, fundamental technological change.
However either way a year or few years of recession are not going to determine the long-term fate of crypto. It will either succeed or fail as a technology most likely, succeed in some things and fail in others—including ways that would be very surprising to people today. I hate macro economics…least favorite part of getting my degree in economics and foolishly thinking I needed to continue my studies at a graduate level. So with the power brokers of the planet wanting control and doing their level best to make cryptocurrencies either illegal to own, or unacceptable for trade, could dampened their value.
I used to see bitcoin on many major sellers, now not so much. A minor fear could be wealthy and broke. So the value has to go up in value if the amount is fixed like bitcoin , but how difficult will it be to use your new found wealth?
So as a store of value it almost has to go up. But as countries try to protect their economy and stop currencies that they have no control over you have to have some concern. This is a lovely question, the best time to buy Crypto coin is during recession.
You keep filling your purse at low prices. But you need to be careful of the project you invest your money in. Most projects are just repetition of other projects while some are just scam.
A project that focuses on real problems worth buying during recession. Yanu Yanu. Recently they won 2nd best start up. They focused on unavoidable market and solve real human problems. A global recession would almost certainly have a positive impact on the value of cryptocurrencies. The biggest use case that crypto has right now is as an alternative to fiat money, especially from countries that heavily manipulate their currency.
A big contributor to the bull run of came from the notoriety cryptocurrencies gained from countries like Venezuela and Argentina. Many citizens of these countries moved a large portion of their money into the bigger cryptocurrencies, like Bitcoin and Ethereum. Imagine if this happened on a larger scale with more countries. Emerging market economies have not done well so far in
You may have noticed that I have been MIA for the woulf few weeks, but fear not, I hpapen still hanging around although very busy! It is widely accepted that Satoshi was unhappy with the economic situation at the time centralized financial institutions, bank bail-outs. In a follow-up post, I will discuss what will happen to Cryptocurrencies, as a whole, in such event. A market crash, and subsequently a financial crisis, occurs when piling on this debt is no longer sustainable and everything comes crumbling down wokld a house of cards. In order to back this post with facts, I would like to list below the different assets, used in the charts that follow, alongside a brief description and the reason behind their selection. However, not all bonds are made equal.
Cryptocurrencies Will Be Pushed Higher as an Alternative to the Dollar
It is being predicted that the chance of a global recession is now as high as it was in July — just before the housing crisis sparked a massive downturn in the economy. This may be good news for Bitcoin. A Growth Recession is different from the economic crash seen in The last recession we saw was the catalyst for the creation of Bitcoin BTC. While it is still debatable as to whether Bitcoin can operate as a true hedge in the face of financial uncertainty, it certainly has been suggested in the previous few months. Fears of a U. More so, there is talk about negative interest rates potentially coming to be in the near future — with U. President Donald Trump even imploring the Federal Reserve to cut rates to less than zero. The USA should always be paying the the lowest rate. No Inflation!
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Bitcoin Forum. JVanL Expand Collapse. Joined: Jul 2, Messages: Likes: 2. Things are pretty rough for the global financial markets at the moment. Recession affects all of us, but for those that hold Bitcoin wuld other cryptocurrencies, things might feel a little more uncertain. With that being said, the invention of Bitcoin was in a sense a response to the global financial crisis in Satoshi Nakamoto himself cited bank bailouts and centralized financial institutions ti reasons for the creation of Bitcoin.
So, what would happen to Bitcoin if the world had to go into recession? We have some ideas. What Exactly Is A Recession? There are so many different factors that can cause a recession: political instability, climate changewar — the list goes on.
Recessions are terrible for the global economy and hit us all hard. Joined: Oct 22, Messages: 2 Likes: 0. I think if shit really hit the fan, then Bitcoin price would be the last thing you'd worry about Other than that, I think it will go up a lot, same with gold, silver, and so on traditional stores of value.
Joined: Oct 5, Messages: 11 Likes: 1. Http://trackmyurl.biz/what-is-gbtc-bitcoin-investment-trust-3610.html think a rapid string of selloffs can lead to fall in asset prices or may be more saving withdrawals. RainingTacos Expand Collapse.
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A. Antonopoulos - How Bitcoin can save us in the next recession.
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Related Questions What happens to cryptocurrencies when the next global recession hits? Group Subscription. Recession affects all of us, but for those that hold Bitcoin or other cryptocurrencies, things might feel a little more uncertain. Renews yearly unless cancelled. Faced with a recession, Bitcoin may serve a market function similar to go here of a safe-haven commodity, rather than an equity, due to its inherent scarcity and decentrality. The ICO part would be hugly impacted by a recession. What happens in a recession? China has been confronted with multiple economic and financial problems this year amidst an ongoing trade war with the United… read. Another factor is that cryptocurrencies are, for now, a micro-niche. You can bet real estate is going to fall in a global recession.
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