Bitcoin Holds Greater Opportunity During Upcoming Recession
Recession and market turmoil unavoidable however Bitcoin has a competitive edge
Image source: pixabay
Talks of a US recession is no longer a speculation as David Rosenberg, Chief Economist and Strategist of Gluskin Sheff, thinks that [US] "will be going into recession ... this year."
"We've got more than 80 percent chance of recession just based on the fact the Fed is tightening policy. This tightening of financial conditions that we've seen in the markets is going to end up having a cascading effect on the economy for the first few quarters of this year."
Source: CNBC
Eyes turned as the crypto community wondered if Bitcoin could be the saving grace of the economy. The answer is no, unfortunately. The impact of an economic crisis that is about to happen would be many times the magnitude of Bitcoin's current market capitalization. Collateral damage from the bear market is expected to affect all market players.
A report on cryptobriefing came up with two possible scenarios for recession:
- Liquidity crisis
- Sovereign debt crisis / currency crisis
In a liquidity crisis, a force-sell situation could happen and stored assets would have to be sold to clear debts. Investors who have been trading short are likely at higher risk. Selling Bitcoin during this period would likely not be beneficial for its prices.
Image source: pixabay
A much larger recession that spills over to central banks could cripple the value of fiat currencies, hence Gold and Bitcoin were expected to become safety havens as a store of value. In the past 3 to 6 months, India has increased its gold reserves by $167 million and Russia increased by 7 percent. However countries facing crisis such as Venezuela, have been actively selling gold where rampant hyperinflation and poverty spreads across the country. This does not bode well for as it pulls the income gap wider apart.
Bitcoin as a form of 'digital gold' has never been fully stocked up by national reserves. The people's trust on fiat has always remained strong over the years. When this so-called trust wears down and becomes paper thin, Bitcoin's decentralised and deflationary properties would become a shining pillar of hope.
Even though Bitcoin's role in a recession is limited, the shift towards contactless payment and virtual storage are concepts gradually accepted by the people. Whether Bitcoin's value rises or falls, I am going to continue to hodl and use BTC in the future. Or at least until a better cryptocurrency is created.
very very good content, thanks honestly I'm appreciated, it's true there a lot of signals of coming recession, And Trump blaming for all that- FED,
guys awake it's really serious trouble around just on the corner.
The fact is USA debt is massive and even student loans reaching 1,7 trillion in US dollars. But still yes we have safe haven it is GOLD/SILVER and their are in 5000 years our safe haven. Plus from 2008 we got a gift from Satoshi Vision and that Is Bitcoin. Its Unique technological model, with limited supply in total 21 millions and all that specifics makes me realize that this asset is as well our safe haven plus 2020 will be the halving year. So it means that mining rate will decrease 50% and every time when we got halving (every 3 years periodically) Bitcoin price Mooning hard! and even now when the BTC price are down from ath 85%. We still have historically BTC price with higher lows if compared to US dollars or other currencies. My conclusion guys, in 2019 create the best plan as you could to and accumulate as much Bitcoin as you can . (this is not financial advise just my friendly opinion)
this post author, tysler this is exactly the best information that all people need to know, Thank you for let us know! :))
thank you, @goldeninvestor, I hope to inform as many people as I can with my articles. I am glad it reached out to you. Followed and upvoted :)
-tysler
Wow @goldeninvestor. Excellent comment.
I'm sorry but this was poorly written. is english your first language
Hi @glenlivet
To tell you the truth, this is one of the better posts I've read today. Perhaps Im enjoying because Im not native english speaker.
Cheers
Piotr
Great piece of work @tysler. I always enjoy your mature way of writing.
I do wonder lately if there is any way at all we could avoid upcoming financial tsunami. Will goverments come up with some solutions? And yeah, I'm quite pesimistic.
Im not completly sure if you're right. It does take some time for economic crisises to unfold and current administration will do all they can to push problem a little bit futher away in time. It's obvious that current rulers in most leading countries will lose their power soon and all they need is another year or two without heavy recession.
It could give bitcoin and blockchain enough time to develop and attract enough trust and attention. I mean, that's just my Xmas wish hahaha :)
We also need to wait and see if goverments will be able to bail out banks again (that could give them plenty of extra time), or will public opinion be strongly against it.
Wouldn't you agree buddy?
Yours
Piotr
Hi @crypto.piotr, I think mature you meant my slightly dramatic way of writing :D
I think in a financial crisis, everything in this world still looks the same! Just kidding :) Governments and businesses will be in some trouble, ranging from increased debt, cutting bank interest rates, stock market go red, retrenchment and unemployment. Unfortunately some will lose their jobs. But we are resilient, and usually cope with the difficult times by cutting our spending and expenditure.
I hope so too. It will be good if smaller economies could band together financially with Bitcoin or other decentralized cryptocurrencies. That way, we will one day be moving towards having Government as a service provider of a country. Banks as a financial services provider are just way too unreliable.
-tysler
Love your comment @tysler. Not so dramatic this time hahaha :D