Topic: Bitcoin: A safe haven in times of economic recession? (Read 245 times)

Yeah, that's why I wouldn't really call it safe haven at all. Gold is the literal definition of safe haven (and in my mind the only one other than a standard fiat like USD). Park your wealth there and it stays the same for a very long time.

Many years ago Swiss franc was the same because of the peg but after they changed it I remember in forex days you can't even rely on it as much now.

As much as I love Bitcoin, you honestly can't tell how much it will be in 5 or 10 years. I believe much more, but I gold is more certain to hold value safely.

What you think does not define what a safe haven is.


Yes, despite the fact that more than half of the respondents do not want to know and make categorical statements about it.


Another one who doesn't get it


Right. But there are those who talk nonsense about it, such as the following:


Yes? Give an example of those safe havens that according to you never go down in price.

Certainly the panorama that you illustrate is quite bleak... the volatility of the current economy is highly unpredictable, I had previously commented in the economics section that the possibility of globalized deflation can even be contemplated, different aspects that we see today in the economy have that unfavorable scenario plagued by fear and panic... and if for that reason it is better to look for alternatives that in one way or another make us feel that our capital is not going to be in the ground... and although you comment that Bitcoin is a great idea to counteract this, lately I have raised the hypothesis that keeping all my money in BTC is not such a good idea either, just a part of my capital… well as I said it is better than Fiat… but on the other hand I see an option of using gold even better, as some comment here, for many years it has always been the number one option to safeguard money. That's why one part in Bitcoin another in gold and... UST could also be an option in my opinion.

I still can't convince myself to make bitcoin a long-term store of value despite an economic recession. So far bitcoin is an investment asset that allows me to earn returns, nothing more. Certainly not because I don't believe in bitcoin, but because I haven't gotten to the stage of having that mindset making bitcoin a store of value.

I don't care what other people say whether they agree with my mindset or not, but it's a decision I have to make considering my own economic condition and one other thing.

In my perspective, Bitcoin is a safe haven for all those who strongly believe in its characteristic of hedge against inflation and one of the best assets to hold for long term, with potential of substantial rewards. Bitcoin price is increasing due to ETT requests submitted by many financial institution including BlackRock. The market has welcomed this move and development has generated sense of optimism and driving increased interest among investors. Currently, Bitcoin is currently trading around $30,700 and next resistance level is around $31,600 which is a strong resistance. If Bitcoin surpasses this level then we may see strong buying momentum in the market.

That long period of time part is the most important part and yes I agree that it's a safe haven for a long period of time but not so much for the short term at all. I know that it's not going to be that easy to do something like this and then go ahead and just end up with a bad result in the first week and leave, that would be bad.

If you invest, you should invest knowing that bitcoin would be a good profit maker for you on the very long term, but you can't be expecting that to have a good return in the first month or two. I hope to retire by the time I am 40-45, which means I have a bit more time before that, and I base that on how much I am making right now with bitcoin profits by getting as much as I possibly could before I retire.

We are all investing on bitcoin because we want to make use of the chances of getting our digital asset more secured and profitable, when we invest in bitcoin, we can easily go to sleep with our eyes closed and leave the investment to stay long over the time to yield more of its kind, in this same way, we cannot concluded that bitcoin is a safe haven for financial crisis or scam, rather a means of having our investment secured for maximum profitability within some period of time, we can also consider how the market economy of the traditional currency is going, bitcoin isn't affected by inflation or any government implementation policy to determine how it works, the more the economy run under the fear or recession the stronger the bitcoin network becomes as a safe haven over recession because it is decentralized, profitable and inflation free.

Perfectly elucidated mate. Bitcoin can never be a safe haven because of it’s high risk of losing due to highly volatile and unpredictable market. Although I would agree that it’s the best option for investment during recession or when inflation is high, but bitcoin cannot guarantee it’s full profitability despite of its high potentials as an investment. However, if you say safe haven, I would rather suggest investing in real estate or landed properties knowing its value will never depreciate but instead its value will consistently surge high.

Not entirely a safe haven for everyone, if you plan to stay with Bitcoin for years to come then it's a safe haven for someone like you, but if you are the type that has many financial problems that needs to be solved, your first approach should be more income stream, and believe me, it's not Bitcoin, you need to come up with a service that people would need from you and you get paid in the process, fix your financial problem and when you start making enough then start thinking about investing in Bitcoin.

Don't Invest in bitcoin because someone told you that Banks are bad, you will start panicking once you see your 100$ that you aren't ready to see going down starts going down, it's because you are not making money through other means, Bitcoin investment is not for those that have no jobs.

Banks could be bad because you aren't making money when you keep your money in the Banks but if 100$ is all you get, you need to eat man, you need to survive, the solution is JOB, not Bitcoin.

For some reason, the bitcoins price is increasing maybe because investors don't want their money to get affected by the recent economic recession. When they put their money into bitcoins the price will surely increase and will gonna attract more investors to change their minds also now wanted to buy some bitcoins not only to save their money but also to get a chance to multiply it when the bitcoin price will spike due to this event. this is in fact a good thing when they want to increase their money and choose bitcoins to convert it.

Safe heaven mean the asset won't experience any form of negative impact on its price and value. But I don't see Bitcoin as such, Bitcoin happens to be volatile in nature which could even make the holders have a worst expirence compare to what the economic recession might have caused, this could be as a result of a heavy price drop on Bitcoin price. When the price of Bitcoin happens to drop very high which where investors could be recording up to 30-40% loses on their capital in such a case I don't see Bitcoin as a sure heaven.

The only difference between keepings your assets in terms of economy recession, is base on the fact that Bitcoin price could be one an either results which could either be positive or negative. And the user won't have to worry about bankruptcy providing that it's Bitcoin is being stored in an None-custodial wallet where full control is in his possession.

The economic outlook for the US looks pretty rough ngl. The US has put some bandaids on by raising the debt ceiling but when the US defaults on its loans and can no longer delay it and inflation continues at this rate it will cause a huge effect on all global markets to the brink of collapse. One would think that in these conditions that BTC would have a chance to shoot up and find a new all time high, its certainly possible! Only time will tell what will happen.

I agree it's a "Safe haven" for a long period of time. Compared to currencies like my own and all the friends I know who struggle every day with daily expenses rising and costs of everything going up while salary remains the same and savings interest isn't matching inflation.

But BTC vs USD ever since the economic recession has been terrible, USD hit all time highs against so many currencies while BTC is still less than 50% of USD ATH. So what's this talk about safe haven? Why can't Bitcoin just be a normal long-term savings 10-year value going up deal?

I'd say there's no currency or asset is safe haven except agriculture.

Check Bitcoin, gold, real estate, stock etc during bad economy situation e.g. the recent is coronavirus pandemic, you will see all of them were declining. It's because there's not many people have idle money to invest due to fired from the company or the business become not profitable.

But anyone will still need to buy foods to survive, this make agriculture has no impact with bad economy situation. It's not mean agriculture has no risk, every investment has always a risk.

Volatility is the main reason Bitcoin still is not getting mass adoption and is also the reason of its massive popularity. The volatility of Bitcoin is in both direction i.e. in up and down both directions. Even the currency rates these days are not stable as inflation is high all around the world. If one think that Bitcoin is not a safe place to store Bitcoin then neither is Fiat currency.
If you are keeping your money in Bitcoin for long term then surely you will get good ROI but if you are looking to invest for a week or two then you wont get real benefit of Bitcoin.

A safe haven? That's a very wrong way to put it OP.

Bitcoin is a very volatile digital asset, it's not recommendable for those who want to store value for some time, if you want to do that I think CBDC is better if it's already functioning in your country, USD stable coins are good too but I can't say that they are completely safe either.

You can store your 30,000$ in Bitcoin right now and in a week time your 30,000$ turn into 27,000$, that means you are down 3,000$, it's better to store money that you are ready to use as investment in Bitcoin only, not a safe haven that can maintain your exact amount of dollar, you can lose some or gain some, that's why it should be treated as an investment asset.

A "safe haven" does not necessarily guarantee peace and quiet. Bitcoin doesnt have to conform to the textbook definition of a "safe haven" in order to serve that function.

Bitcoin's high return potential is a direct result of its volatility. While its true that Bitcoin's value fell during the financial crisis, a lot of so-called "stable" assets suffered, too. What counts most is development and growth after a catastrophe has occurred. Bitcoin's resilience suggests it may be used to weather economic storms.

Remember that Bitcoin is a technological breakthrough as well as a financial asset. The promise of blockchain technology is what gives it true value, not its current market price. Bitcoin's true strength lies in its potential to radically alter the monetary system in ways the world has only just begun to grasp.

Well, we can only look at the history to see what will happen in the future... because it tends to repeat it self. What did people in Greece / Zimbabwe / Cyprus do when their economy nearly collapsed? The Banks closed their branches and ATMs to prevent a Bank run and they limited the withdrawals of the clients. (Hyper inflation nearly killed the value of their local currencies)

Then people realized that their wealth are being eaten by hyper inflation and they started to buy bitcoins. (Some people bought Gold and precious metals) .... so people saw the potential to use Bitcoin as a safe heaven. 

Holding 4 years minimum can't be called a safe haven, I think it's an investment. Because in my opinion, gold is a safe haven because we can sell it whenever we need money, and we hardly lose value.
It is not entirely true to say that bitcoin is not a safe haven, but given what bitcoin has achieved so far, it is not yet a safe haven. Bitcoin remains a highly volatile speculative asset with an uncertain future. But over time, as it becomes widely recognized and accepted, bitcoin will become a hedge against inflation as well as a safe haven.

Yes.


It is as simple as that to be a safe haven you have to HODL it for at least 4 year periods. Volatility has nothing to do with it. Look at the graph of gold at the time of hyperinflation in the Weimar Republic. Wasn't gold a safe haven then either?

https://twitter.com/DylanLeClair_/status/1396518689177063429

Bitcoin is considered an inflation hedge by many because they think it is a very good investment in a recession. However, we have seen many times in the past that when there is a certain economic crisis the price of BTC is dumped, In this scenario, I think, it is too early to say anything regarding bitcoin.  

And we are in crisis, the highest inflation in 40 years, have you seen bitcoin exponential growth? Or is it still 50% lower than ATH? Like what Wend mentioned, how can an asset with so much volatility become a safe haven for our assets? And do you have any solid evidence about the future of bitcoin? Bitcoin is still being considered a risk asset "invest what we can lose", I hope you haven't forgotten the mantra.

@serjent05, you are right, bitcoin is not a panacea for our world, many people are too crazy about bitcoin and too delusional about it.

They can be right with thinking that global recession and high inflations of fiat currencies which can not be stopped by central banks, will help Bitcoin to gain its price and move up higher and higher. The inaccuracy is they think it will shoot out instantly after a few weeks or several months. It is unrealistic to think so if they see how long does it take for the Covid-19 to cause negative effects on global economy.

Like it is impossible in 2009 to think Bitcoin will be traded after next 6 months because of global economic problems circa those past years. It takes 14 years for Bitcoin to be traded at today price and it needs years, not months.

Generally, there is no safe heaven for everyone. A heaven for me can be a hell for another person because this market is zero-sum game.

You have a point here, but for sure people are making conclusions or just speculating because recently Bitcoin is making huge pumps and they find it more profitable which they don't consider the volatility.
Let's say they compare the Year-to-date (YTD) gains of non-cryptocurrency assets to Bitcoin, and they find Bitcoin is better. Which for me, it's not a valid comparison.

Many people and called "experts" said the same but the result always in the opposite a bit. Look at the of pandemic, it was hit hardly that it feels so much in march the start of lock downs of countries. But of course it recovers just like the other assets after a month or two, good thing it grows so much after few months.
The same thing when the war between Ukraine and RU last year. So what do i mean, bitcoin has a potential to be a safe haven but not yet because it still have get affected—a huge effect from the regulations, world economic crisis and etc.

I also agree that it is somehow doubtful that Bitcoin can be a safe haven during the recession.  Since Bitcoin price is fully dependent on supply and demand, there is a huge possibility that its market will not perform well as the values of items go up in price.  Bitcoin is not a cure-all pill that can solve everything.  With its high volatility feature, I also wonder why it can become a safe haven during economic recession.

No, how can a highly volatile asset become a safe haven? When it comes to a safe haven, it means that the asset is stable, unaffected by a recession or crisis. Gold will be our safe haven in times of crisis, not bitcoin. The proof is you look at what happened during the crisis in 2022 when inflation peaked due to covid and war, and bitcoin depreciated more than 80%, how can it be called a safe haven? 

The original purpose of bitcoin was created with limited supply to fight crisis and inflation. But so far, it is being used as a highly volatile and speculative asset, so it is not yet a safe haven.

Fantastic post OP. Before I say my of opinion, let's concrete the facts, so that my theory isn't confused with what I believe to be a more likely view of the future:

- There is no doubt doubts that during a recession that is fueled by inflation, Bitcoin's value will grow exponentially.
- Bitcoin should be able to serve as a viable store of value if liquidity is not interfered with by as powerful or more powerful entities.
- Everyone should have some Bitcoin at this point, as a serious global recession is undoubtedly looming (and has been for years).

Now for my theory...
This unprecedented show of support to "Test Bitcoin's Use-cases" sounds way too good to be true. In what world would we think institutions like the fed or conglomorates like Black Rock would support Bitcoin as avidly as they are now? For the fed especially, it is destroying their own system IF Bitcoin proves its use case.

Which leads me to ask, and think, is this a ploy to publicly manipulate Bitcoin to disprove its use case, rek as many people are possible and entrap them into fiat money? At least until manipulation is simply no longer possible due to the resources which it would require to sustain.

It's an unlikely theory...though a possible theory nonetheless. Let's just hope that Bitcoin is as we think, being an inflation and fiat system failure hedge.

This has been talked about countless of times here in the forum. As I always say, bitcoin can be used as a means to safekeep the value of assets while the world around us is melting. It retains value pretty well compared to other asset classes out there that are susceptible to crises such as this one. Though one thing to keep in mind is that there is no guarantee in bitcoin or any other crypto for that matter. While in the past, it is relatively safe to leave your money in bitcoin and expect that it will still have the same valuation, or sometimes even greater, we can't tell for certain if that will be the case in the next coming years.

          First, I want to emphasize what an economic recession is or entails. Occasionally, recessions can be caused by factors beyond anyone's control, such as problems in other nations or changes in the global economy. Sometimes they are the result of bad decisions made by organizations or governments. Whatever the cause, the end result is always the same: the economy shrinks and everyone suffers as a result. A global economic downturn could have great effects on other nations and people around the world. Given the size and strength of the US economy.


          The graph above shows that the use of money market funds has increased exponentially during the periods immediately preceding economic crises or recessions. Analysts have noted that this pattern tends to repeat itself during difficult times, such as the 2008 economic crisis and the coronavirus pandemic.

          From any point of view, a global recession is worrisome and, above all, alarming to see how the US authorities minimize the severity of the crisis. While it is 100% understandable that people's perspectives on the economy differ, but you have to know how to recognize the data that paints a challenging picture. The importance of approaching things from a balanced angle should not be ignored. The bitcoin cryptocurrency is highly speculative and volatile. Although some investors have experienced sizeable gains, there have also been instances of sizeable losses.
          In my opinion, honestly these global recession alerts, I feel like Bitcoin has a chance to show its great potential. Bitcoin has the ability as an option to wait and be taken into account for these uncertain times, the risks are known but its rewards are also perfectly known, I can only say that we hope that this does not happen to majors, despite the fact that it may be the BTC a way out of this problem we have to take into account that many people are not involved or soaked in information in this world of cryptoactives, the crucial and main thing in this type of case is to thoroughly investigate Bitcoin, understand how it works and determine if it is fits our financial objectives and risk tolerance.

I would like to know what you think about this topic, I read them...
Fountain:https://www.criptonoticias.com/mercados/nuevas-alertas-recesion-puede-hacer-bitcoin-contexto/