Topic: How will the next big recession affect the BTC price? (Read 869 times)

it certainly might be, but it doesn't really matter what you or i think. if we're comparing bitcoin to gold or expecting it to be a real world hedge asset, what matters is what conventional investors, investments banks and central banks think. in those terms, it seems premature to put bitcoin alongside gold. i don't think bitcoin has "crossed the chasm" so to speak.


i reckon it can. it's likely to outlive us, based on the history of money.

I don't know the chances of a recession coming upon us anytime soon, but such a financial crisis would be generally bad news for all currencies, even crypto currencies.
It might also expose the frailty of centralized currencies and may trigger a switch to bitcoin. And a little FOMO could spark a price pump.

during a recession life still goes on and because of that there will be businesses that will still thrive. for instance during the 2008 recession thrift stores saw a whopping increase in customers as big as 30%. there were stocks that also did well [1][2]. so i wouldn't say "everything" falls.

if you look at bitcoin only as a high risk asset then it makes sense for it to drop too. but if you look at it as a global store of value that is secure and easy to store and also the fact that historically bitcoin has had its own independent cycles that are not affected by things such as Stock Market Crashes then it doesn't make sense to say it will drop.

[1] https://www.investopedia.com/financial-edge/0810/6-companies-thriving-in-the-recession.aspx
[2] https://seekingalpha.com/article/4077422-industries-grew-08-recession-surprisingly-well-now

Bitcoin didn't exist in 2008 so we don't know how it would perform on such an scenario. My theory is that it's way better than gold for most people with a decent amount of technical competence to get it done. Remember that Executive Order 6102 happened and it could come back at any time.

If you think that gold/Bitcoin will lose value "after the crisis is over" then I assume you think these cyclical crisis in the fiat world can be happening infinitely. The big thesis is that hard money always wins long term, so the risk is being outside of gold/Bitcoin and what happens in between is a mirage. Of course, for how long can this mirage persist in time? who knows. Perhaps the US can keep kicking the can down the road for longer than we all can expect. How many trillions of unplayable debt does it take? we'll have to wait and find out. As with everything in life, diversify accordingly, but at this point, I think it's clear that owning some gold/Bitcoin at all times poses lower risk than selling "when the economy recovers".

A lot of mainstream analysts have been talking about it for a while, even before this recent stock market crash. I'd say that the general analyst consensus is that at least a mild recession will start in 9-24 months. Keep in mind that most people believe that the market is governed by the business cycle, where expansion, occurring for about two-thirds of the time, is punctuated by periods of recessions occupying the other third of the time. (Though personally, I suspect that the business cycle is to a large extent a self-fulfilling prophecy...)

Commonly-cited reasons for the end of expansion and entering recession include:
 - Higher and increasing interest rates
 - Tariff worries
 - Possible slowdown in the rate of growth
 - Various economic indicators such as the steepening yield curve, high employment, housing data, etc.
 
In addition to that, I think (though most mainstream analysts would disagree) that the US economy is built on a house of cards:
 - The federal budget is totally unsustainable, and the political climate is nowhere near a point where it could be fixed.
 - The stock market has been rising unnaturally since at least 2011. The S&P500 Shiller PE Ratio just dropped a bit, but it's currently at 30, which is still ridiculous. I think there's been too much money floating around, and nobody's had anywhere else to put it but the stock market. (Rising interest rates are changing where this money is going a bit.)
 - The fractional-reserve, debt-based economy is generally unstable.

So I wouldn't be surprised if the next recession is as bad or worse than 2008. In order to prevent these massive crises (which will probably ultimately culminate in the USD's total failure someday), very serious and painful changes would be necessary, and I don't see it happening.

1º Bitcoin went from 20k to 6k, a year being hammered down by those who profed a lot from the high and that was the limit of the market itself.

2º We do not have the absurd amount of institutional investors and investment funds, which can not give losses to their customers, having in a possible crisis, to liquidate their positions. Our market is based on people, not institutions.

3º Not to mention the many hodlers, people who have suffered losses and are holding their positions, miners that will help strengthen the 6k barrier, and the market sold out, lateralized for months proving this fact.

4º On the other hand we have the American markets in their historic high, where everyone knows that a correction will come sooner or later. (And Bitcoin was created for these moments).

5º Many of the people who have bitcoins are afraid that it falls, but in a fall of the American markets, these same people have hoped that part of this capital enter the market, and that is why discussions like these occur.

6º Our market is small, but strong, and everyone knows that when they make the sale, that occurs the loss. I believe that most individuals in our market will not realize their losses in a moment of crisis. With the great possibility of entering a lot of money soon after they liquidate their positions by lowering the price, it would be stupid.

7º Our biggest concern is who made profits between U $1k and 6k, these people < that were the first, and the biggest enstusiasts > will be stupid enough to destroy our market, with a possibility of it simply multiplying by 10? No, I don't think so.

Bitcoin is never difficult to obtain with how divisible it is, and this is exactly why the price doesn't matter in terms of actual usage as currency. Stability is the key element supporting it.

In the stock market you quite often see splits happening when share prices are too difficult to buy into for average joes with some stocks reaching $1000 per unit. In this case it would be well justified to talk about hard to obtain.

There were rumors that Amazon's stock could turn out to be a split candidate with how it touched $2000 not that long ago. Not sure if it's going to happen, but it wouldn't surprise me at all.

All these things are true but for modern countries, in backward countries still people do not have internet facilities therefore they  do not have any idea about bitcoin, I think that it will take some more time when all the people of the world will know about bitcoin.

how about when everything is losing value? that's usually what happens in a financial crisis / major recession. the entire economy contracts. it's not just fiat tanking in a recession.

in fact, fiat will often perform better than many assets during recessions, barring a hyperinflation scenario. the USD actually bottomed very quickly in early 2008 (before the collapse of bear stearns) and never went back to those lows ever again. gold dumped most of that year. the real estate and stock markets were hit much harder.

anything is possible, but on average, everything will lose value and the highest risk assets will lose the most value. bitcoin is a very high risk investment from any conventional investment perspective, so i'd expect BTC to fall with the rest of the market.

i have serious doubts that we're entering a major recession yet though.

Bitcoin has very limited supply while the demand for bitcoin is increasing which means that bitcoin will be very difficult to obtain because bitcoin supply can run out, so I'm sure bitcoin will go up again and can be very expensive again, it only takes time for bitcoin to rise again.

Well, the dream would be that Bitcoin would increase in price.
But everyone knows that, people act in weird and irrational ways.

Cryptocurrency should become some sort of "safe haven" for the average Joe with a savings account.
But mass influx of cash results in bubbles as people wish to claim their profits once they are happy with their earnings.

This keeps the price down and fear can kick in for some if they see investors cashing out.
 

Bitcoin is insanely small. As long as Jeff Bezos net worth is valued higher than the entire Bitcoin marketcap, it should be really obvious how tiny BTC is, and therefore how much upside it has. But a lot of people in this field want x1000 overnight, this is why so many shitcoins keep being bought by noobs and gamblers.


I've had dreams (or may I say, nightmares at this point) of governments going executive order 6102 on steroids. Im talking about police going into your house with radars, inspecting your backyard and looking for buried metals, cracking safe locks and whatnot. Not only they will demand gold to be deposited on their institutions, they will look for it, and they will look try really hard at ruining people's lives. They will stop people holding gold on any border.

On that moment it will become obvious for goldbugs in denial about bitcoin, why being an intangible digital asset was always a positive, for this revelation will be too late for them. Everyone else will be buying as much BTC as possible.

I believe the big question will be: How global Bitcoin is, in an eventual major crisis.

The crises are always originated in some local fact and spread to different markets. The reason is trust. The entire financial market is based on gentlemen's agreements with some legal security. In major crises, these securities are few. Since the current money is virtual and backed by securitization.

If Bitcoin is a global asset, used on a large scale both in the financial market and to buy local goods and services. With great volume negotiated. Easy access for ordinary people and for big investors. The crisis could be an opportunity and many could buy Bitcoin as a store of value.

In most countries, it is very difficult for an average person to buy an asset and keep it away from the banking system. With what asset could I do this? Maybe with the gold. But not every country has a retail market that can provide that. Many people buy jewelry, objects of art and real estate for this purpose. We are in a new generation that does not care so much about investing in real estate. We use less and less jewelry. The object of value that most people carry is a cell phone, which loses value in a year. And investing in art is still for very rich people.

So in countries with volatile economies, whose currency can be greatly devalued. If you have Bitcoin, this can mean that you could have the only thing that makes you stay with some valuable commodity worldwide. And that you can use during a crisis. We are seeing this in countries like Venezuela.

it is interesting to see how many people think this way!
but that's not how it works. in an economic recession when your fiat is tanking and losing its value, you desperately look for "ways" of storing your value so that your purchasing power doesn't suddenly evaporate. the "way" is to invest your money in something or in other words to convert it. you can do it with anything you prefer, in extreme cases it can be buying goods, but usually it is buying assets that keep their value (aka rise against  your fiat). and when you check your "balance" you are not happy thinking you got rich, you are happy when you assess how much loss you prevented!

Idk why this thread is even talking about the next recession. What happens next is the great depression II.

Everyone has the same logic. If dollar goes down and the devalued then bitcoin will be higher. However, they are all missing out on the point of what economic recession does to a population. If you do not have any means to survive and have a life or live paycheck to paycheck I can promise you that you will not be looking at your bitcoin wallet and think how rich you are and just be happy with it, you will sell it to give yourself a break.

You can't think that just because bitcoin gets valued higher the more dollar devalues you could consider an economic crisis could potentially increase the price even more. You will not have public that has money to invest because they will all need it, you will not have whales who invest into this because they will have troubles with the banks and you will certainly not have wall street dudes trying to get more bitcoins.

When you do not have any buyers like that why do you even consider that price will go up, you need buyers in order to get the price higher whereas there will be more sellers instead because people will need money.

That's where I'm coming from. Bitcoin has great potential and its economic design is damn-near perfect for establishing sound money. But it's simply ludicrous to think that 9 years later, it could be a safe haven asset. It's quite experimental and we still see massive bugs from time to time.

Heck, even safe haven assets get pummeled during financial crises. The dollar was crashing throughout 2007 and early 2008 as the Great Recession took hold. Gold experienced a painful 8-month decline during the 2008 crisis as well. Nothing is "safe" when shit really hits the fan.

In the coming decades, I could see Bitcoin potentially acting more like the gold market though, as a legitimate hedge. For whatever that's worth.

That great if young people will become more motivated with cryptocurrency, and for my perceptions young people nowadays don't appreciated Gold anymore unlike the vintage days. However, the effect to the marketplace will always have to be in perfect time as btc price been erratically showing sudden changes which everyone couldn't expect to happen. Further improvements and developments continued to be pursued by some whales. For now we should exert more patience in order for our asset to grow for much sustainable profit.

Yeah thats true, and I would expect younger people to move into Bitcoin during a recession rather than gold. And I'm sure some percentage of big money that moves into gold will go into Bitcoin instead. So I think you're right we could very well see a crazy ride with a likely stock crash and recession timed to coincide with the next bitcoin run. Perhaps it'll be like a perfect storm and everyone is looking for it to break $100k next bull run but it goes to a quarter million or higher at the next peak. As for the money flowing out after the run, well that is normal for Bitcoin so thats to be expected.

It depends though. Money on the financial market moves to the easiest alternative within the same legal platforms, which means that Gold will be the first to actually benefit. It's crazy liquid, easy to buy into, is globally respected and accepted as safe haven asset, etc.

In this case a Bitcoin tied ETF would actually come in handy for legacy parties, because the switch is super easy to make, and they don't have to worry about storage and whatnot, which is a pain in the bum for them. If even a slight percentage of the money usually flowing into Gold will enter Bitcoin (could be for diversification purposes), you can be sure that we'll be subject to one of the wildest Bitcoin rides ever.

The only downside of that is once the market calms down again and actually shows signs of recovery, most of the safe haven money will flow out of Bitcoin again, just like how it flows out of Gold.