Deflation Before Inflation? How will Bitcoin React in regards to Upcoming Recession?
I anticipated 2020 to be a big year, however, what I didn't expect is that the situation can easily escalate and go in the completely wrong direction.
Like what an actual fuck, Coronavirus, followed by chain split, earthquake, Quantitative Easing, crypto crash, the stock market is continuously experiencing hard times sustaining the price and retaining the trust of the investors.
And the biggest problem is that we have yet to encounter the deadliest threat which is silently sitting in the corner waiting to emerge.
Just think about it, it's not a puzzle.
Governments are starting with a practice of printing money out of thin air, utilizing the quantitative easing theory which basically means that in order to print money one does not require any backup value upon which it currency will extract value, thus hurting the economy on a long run.
Consequently, the dollar ended up being considered as a safe haven asset, while "slowly "increasing" in value in regards to other currencies.
Such behavior leads toward deflation as more and more investors are actually holding its savings, believing its value will continue on rising.
People will stop spending and buying, especially luxury cars, houses, planes, and all the expensive stuff - Waiting for a better opportunity.
Going further, if there is no spending there is no economy. The most relevant indicator is FED basically cutting interest rates to around 0.1%.
Now, when the coronavirus fade away, people will be thrilled to be able to go out and have fun. Those who saved their money will start spending like crazy, the economy will seemingly perform better, until the inflation hits.
Just imagine how much money is needed to fund the whole country with 2k dollars per month.
Hmmm, on the other hand, big Corporations and Banks are in need as well, liquidity crisis seems inevitable, corporation income is starting to shrink and it would be unethical not to help them as well, right?
No to racism! LOL
On a further note, it is worth emphasizing that those who support UBI are either ignorant, uninformed or have other motives.
Printing money to stimulate unemployment is a way to go. Clap clap.
To be honest, I haven't read is there anything specific in regards to being eligible to participate, but it seems UBI is gaining more and more support from governments on the West.
Once the economic collapse they will blame it on "we were trying to help those in need"...
How will Bitcoin behave during a recession and will prove if worthy in times of crisis?
Bitcoin was born in the dark!
Not too good I guess. Who is still there to buy it when there's that much uncertainty, jobless people and insecurity.
I believe it might skyrocket once the selling pressure decreases. Just remember, dayle traiders with low liqudity are not important, only big players count.
One whale can easily move the price of bitcoin, thus pulling alternatives on top with it.
Will be interesting to see what happens after big mining pools get rid of weak hands waiting for halving to happen.
After this halving I assume that only big mining pools will survive. With 6.25 BTC per block at this price it's simply not a business anymore.
The idea is once miners stop selling what they earn, especially in case of big mining firms, bitcoin will skyrocket. People doesn't seem to know how market behaves.
Once there will be no strong seeling pressures on specific prices and we go through for instance big selling wall at 15 k , btc can easily reach 50k because it will just keeep on going as the masses will become greedy.
I don't get how they could survive if they don't sell... at least to cover the costs. But if you look at mining as a business you won't start mining just for covering costs, I mean you're not doing it for Satoshi, but for satoshis. I guess after the pandemic will end and the digital dollar and yuan will be a reality people will look more into bitcoin and crypto. On one hand they'll have the peace of mind that they can sustain their lives further and they can invest something on the way and on the other they will have the confirmation from the governments that this is really the future of finance.
Every project/investment comes with a risk , there are people willing to take that risk.
Some of them raise credits, some of them are actually running the business in negative speculating that price will increase over time...
Nevertheless great times ahead, we will witness the biggest shift that ever happened