Topic: Financial crisis 2.0 - What will happen to bitcoin in the next crisis? - page 2. (Read 3488 times)

Well my opinion is that bitcoin value will rise meteorically in times of financial crisis. People will want an accessible investment vehicle for their money and crypto has always been a good option aside from gold.

Just take a look at Zimbabwe, people flocked to Bitcoin to preserve value and that drove the price up at their local exchanges.

These days everyone seems consider everything overpriced ... stocks, indices include cryptocurrencies etc. consider it as a bubble and then start to relate this to the last financial crisis that occurred 11 years ago, i don't think this has a direct relation.

People just looking for an excuse on what's happening right now and they found that the financial crisis 2.0 is the one that fit with the current condition which I personally tend to disagree.

There might several huge financial problem such as china vs US trade war causing any financial market collapses... free fall etc. Yet we're not experiencing it right now or got some signs of it? No. Bitcoin itself would remain unpredictable wild.

If there is a big recession like that in 2008 and we enter a financial depression phase I think many will be chasing out their crypto, but we may also see a lot of market volatility as people desperately try to make fast money in trading cryptos as well. The mega-rich will again get to buy and hodle even more cheap Bitcoin and other sound cryptocurrency assets and control the market even more because they will own an even bigger chunk of the crypto pie that they already own now. This is how it has been and will always be. The poorer and middle-income folks will be selling off every asset they have cheaply to stay alive, while all the big Guns will be blazing and scooping up all the cheap mess the rest have left behind in their panicking wake. I also believe more will invest in gold, as gold is always the very solid asset people invest in and trust in times of acute crisis.

IMO this crisis also affects the crypto market. The need for money would increase and this inflation would cause panic in people.

It could be the reverse, that depends on how people will evaluate it at that moment.

It is also possible for them to turn to low volatile investment types. Maybe less losses.

It depends on the nature of the crisis. If it was to be hyperinflationary, then the answer would be simple - bitcoin, given its decentralised money supply, will hold its value far better than conventional fiat in that period of time. Especially when you consider the increased demand for it as a store of value.

If it was to be recessionary, e.g. a popping of a bubble, it could be hard to tell.

I suspect that people would initially rush to traditionally accepted safe havens, like T-bills, gold, etc. at a period of time where BTC value may dip slightly. But as time goes on, and investors recognise that bitcoin is really one of the best assets in storing value away from the fiat economy, demand will grow.

There's only supply and demand basis regarding the price of the bitcoin, I think bitcoin have a strong community to support it. Yes, there's pumps and dumps but the most important thing is the bitcoin is still going upwards as time passes by. Mass adoption is needed if we want bitcoin to be our mode of payment.

People do not pay their mortgages "no matter what", in 2008 there was tens of thousands of people who got kicked out of their houses, but when a crisis comes and the financial world collapses even if the banks seize all of the houses at the first sign, they still have to sell them and they usually sell them for far cheaper which means they will have to both wait and also not make all of the money back.

It is really not an easy task and proof that people sometimes do not pay their mortgages, so they may not sell their bitcoins if it is not even remotely close to their mortgage. Sure if they have to have their cars repaired or something they might sell but a guy who has 100k mortgage debt do not have 100k worth bitcoins, they either have zero because they are in debt or they have a very tiny amount.

If there is a economic crisis world wide people will sell off the assets that will have direct implication to their total asset and will look for assets that are not controlled by any government as these crises are a result of bad policies by these politicians and BTCitcoin is an asset which is decentralized and can be trusted than any other investment during recession. Other than these where do people invest during recession, no investment is safe during a recession .

Imagine someone is paid 0.20 bitcoin monthly. This occurs after all 21 million bitcoins are mined.

Now imagine that the total money supply of bitcoin is expanded to accommodate a maximum of 42 million bitcoins.

A worker being paid a static sum of 0.20 bitcoin monthly could witness their spending power decrease significantly as the total supply of bitcoins trends towards 42 million. That example forms a microcosm for what is happening in many modern economies. And perhaps a decent example for bitcoin's deflationary model being an optimal design choice.

With a significant portion of an expanding money supply going towards debt rather than circulation, the effects would be near to the same in terms of it devaluing the purchasing power, standard of living and net worth of consumers. In my opinion anyways.

I'm 100% in agreement with you and your conclusion on the matter.
However M2 is not the actual money printing schematic, it is mostly money created through debt.
As I said, they take it on credit from each other and you must know that FED has no other way to introduce money (M1-cash) in to economy than making a public debt. Printing itself is like 0.8%[?] of all the assets. Printing is not a problem, fractional reserve is.

Nations don't habitually overprint currency?  



The most glaring chart is japan's high money supply inflation in spite of its notoriously low birth rate. Inflation of money supplies is far outpacing population growth in every instance.

I think the united states has laws against debasing or devaluing the money supply. It does nothing to deter it from happening. There is considerable pressure on regulators to follow political narratives. We have witnessed the official definition of terms like unemployment being rewritten to illustrate a more aesthetic view of the economy.

Inflation is no different. In the united states, the official definition of inflation was rewritten years ago if I remember correctly. To paint a rosier image of the economy. Under the old definition of inflation, the US would be experiencing near to 10% inflation annually.

Money is being printed to oblivion around the world. One key reason why economic outlooks are bleak atm.


Throughout history, governments have typically operated as machines of wealth redistribution.

This means governments collect a high percentage of taxes from poor to middle class earners and redistribute that wealth to the rich who pay a significantly lower percentage of tax.

Deflationary currencies are deemed "bad" as they limit the degree to which wealth can be redistributed from the poor to the wealthy.

Borrowing is deemed "good" as it allows for governments to spend more capital on wealth redistribution than they currently have on hand.

This doesn't imply that wealthy demographics are evil or immoral. Elites have real knowledge and comprehension which allows them a superior position. For whatever reason, other demographics cannot find it within themselves to be skeptical or question the status quo sufficiently to begin to address underlying reasons behind inequality in taxation, wealth and wages.

People love to over-romanticize things within a "one percenters are so evil and corrupt" vein. While playing the victim card. I think the harsh truth is, everyone plays to win. Those at the top of the food chain are a little smarter and work a little harder at it.

When the crash comes I think crypto is going to fall with it, people will sell assets to pay their mortgage bill regardless of type. However I think once it has settled, once big money starts buying up assets cheap, crypto is going to be one of them!

I just notice that some of biggest rich family just start hold a lot of money, cause The next crises is coming.
I dont know what you think about bitcoin in this scenario. Is All impredictible.

We need hold our belts and wait for the Russian mountain

The problem is that they don't actually. Printing is usually mechanism that is leading to destabilisation of any given fiat, most central banks have in their status, that they will protect stability of a coin they govern. Law usually is set this way, so that central simply cant print in to oblivion. The thing that they do is much, much worse. They borrow. Borrow from each other at the expense of future generations. Effect is of course exactly the same, just like you described but stable, slow and semi-predicable.
Politics of acceptance for the inflation is based on a false premise, they (the bankers of today) where taught for their entire schooling, that deflationary currency is bad for the macroeconomy. 100 years ago, nobody was aware of services driven economics. It was all about industry but times has changed. Today we spend most on services not physical goods and that's why deflation proves itself quite useful because people are addicted to those services. They cant imagine life without them, so they pay despite their money gaining in value, system spins the same way, if not faster. Bitcoin proves this.
In my opinion crypto will retain it's position as safe-haven during the upcoming crisis, it will be the best store of value. 

I think that's a great  and difficult argument. In my opinion there will be lot of possible scenarios.
If I had to bet 3 things may happen:
 
1. Mostly wants to cash out dollars and price goes DOWN (most possible scenario imo)
2. Mostly want to invest in crypto cause they think it's the future and accept it has an alternative form of payment -> price goes UP (unfortunately I don't see this scenario possible right now)
3. BTC price will remain almost the same (or increase a bit) accordingly to USD/FIAT loss of value and things remain the same as now (more or less)

In my opinion, investing in bitcoin in particular or cryptocurrencies in general has a HUGE risk.
The reason is that our market is being run by the capitalization of many sharks. As you know, bitcoin has no value when it is not run by anyone, its value grows because it is manipulated by sharks.
and a market full of manipulators, the level of risk in investment is enormous.

AFAIK inflation growth has outpaced average wage growth for many years since the 2008 crisis. The cost of living expenses is growing at a faster rate than wages. This negative trend is triggering economic slowdown throughout the world as consumer spending fails to keep pace with the appreciating cost of things like real estate.

To compound this problem, all nations are overprinting fiat currency in an effort to over-compensate which further devalues the purchasing power of consumers, further exacerbating issues relating to stagnant wage growth. Economic slowdown is the result. This produces a vicious cycle where even many banks are becoming fiscally insolvent due to their leveraged holdings being dragged down in lock step with dwindling economies produced by wealth and wage inequality.

It wouldn't be too surprising if we have a real world answer to OP's question before long.

Bitcoin will definitely retain its value better than overprinted and hyperinflated fiat currencies. I think bitcoin also has advantages over precious metals or bonds which could see its value skyrocket in times of recession/depression. The real question is whether state based regulation would condemn or embrace bitcoin and crypto currencies.

Would nations like the USA embrace bitcoin as a means of salvaging standard of living, were the dollar to devalue/hyperinflate. Or would they instead opt for a policy where they ban and repress bitcoin, even though it could be their best option for economic prosperity and stability. And also how effective/ineffective would attempts at bans or regulation be.

the possibility of cryptocurrency price movements in the future will have a downward movement in prices because this may be influenced by the world economic crisis to be more terrible, many do not trust digital currencies anymore and many people who want to save their assets without having to use digital currencies again.

Price of bitcoin will get hit like all other assets in the world initially but later this may leads to the increase of adoption to next level since the economic crisis of 2008 create the need of bitcoin and the next stage will make it realize why we need to the most people with common knowledge.

I think if that should happen, bitcoin will be preferred by people because at that time , because of demand, the price of bitcoin will increase. So saving your money in bitcoin will not only be a secured instrument but investment as it will keep appreciating.