Topic: How would a U.S. (or multinational) economic collapse affect bitcoin prices? (Read 2898 times)

I think the extreme end of your scenario is very unlikely, but some major bank defaults and possibly a some soverign defaults, incluing the US, is a possibility this year. I think disappearing savings and bank runs on banks like in 2008 will create a lot of interest in financial instruments which have no counterparty risk, such as bitcoin. As such I think it could be very bullish if banks and other major capital gets involved, but this needs to be balanced against ingorant people thinking of bitcoin is just another one of these collapsing bubbles and panic selling. If you're worried about extremely rapid economic collapse in the US then you are probably living in the wrong country. Go and live somewhere with lots of space, few guns and few people, it's much more relaxing.

How would ripple do better in case of deflation? Everybody defaults in a deflationary collapse, including those people supposedly being trusted in ripple.

It depends entirely on whether or not it is a hyperinflationary or deflationary collapse. In a hyperinflation scenario, everybody has money but it doesn't buy anything. Bitcoin will do very well in this case.

In a deflationary scenario, nobody has any money and something like Ripple would do better.

I think a hyperinflationary scenario is much more likely because doves control the Central Banks of the world and there is no political will to allow the type of correction/contraction needed to clear out all the malinvestment that is clogging the capital structure.

More likely than either case is stagflation; rising prices and stagnant economic growth. Bitcoin will do well in this case also, but not as well as in the hyperinflation case.

Of course you can. You would just have to pay a lot more than before. If bitcoin trades at a million dollars or 500 euro, then I will sell you one of my coins for a million dollars and end up with 500 euro worth of purchasing power. My bank will convert them to a useable form of currency so it doesn't matter to me.

That would be wonderful. The worse the dominant economies get, the more people will flee to alternatives.

This is a very interesting topic and will be worth following as it unfolds. Let's see...
Assuming the net still works, very likely. And it most probably will since so much of our infrastructure depends on it.
Gold is only more reliable if the net goes down. Otherwise it is less reliable as it can be confiscated, which might very well happen.
Why would this matter? Setting the US aside, other countries will fear for their economic lives if the dollar implodes so they will be looking for some kind of way to get through the inevitable following shitstorm safely.
Bitcoin is economic survival in a world of inflation. Moreso hyperinflation.
Localbitcoins. Better yet, just trade with your neighbors. Eventually we may have regular bitcoin meetups in local neighborhoods all over the world.
Prohibition worked so well. Doesn't matter, unless they can take the blockchain itself down (they can't) bitcoin will be fine.
This one is legit.

If the US goes through another economic downturn then it's likely that Bitcoin will fall in price as speculators and investors sell their holdings in stocks and commodities (gold included) to seek refuge in the dollar and treasuries. Not sure what would happen if an actual dollar collapse were to occur though.

In hyperinflation you don't wake up one day, go to safeway to buy groceries and suddenly they won't accept USD, and you have to pay them in gold or something. The way hyperinflation works is for a couple of years everything is 'rallying' (by everything I mean stocks, commodities and other foreign currencies) and everybody is feeling hi-ho pippin dandy and then you realize that the food you will buy with the money you made from that latest rally is also a commodity so it costs more due to that latest rally as well. Actually thats how all inflation looks. The thing that separates hyper inflation from normal inflation is the inflation-induced rallies becoming commonplace enough, and with high-enough liquidity that big business realizes they can stick all their free cash into assets into commodities that will benefit from such rallies, rather than in USD, producing an effect similar to what would happen if Satoshi decided he wanted to spend all his bitcoins on real estate.
What does this even mean.

If the dollar goes to shit you wouldn't be able to buy bitcoins with it would you?.
Who would want dollars if they are going down the drain?

In the event of an economic collapse and hyper inflation only a few people would get into bitcoin and flee the country fast enough.

Bitcoin would increase due to the fact that people are getting in but the rise will be temporary.

This question is stupid because it clearly depends on the type of collapse. If its the survivalist somehow-inflation-is-going-to-make-power-grids-go-offline-for-no-adequately-explained-reason then obviously it would be bad for BTC. If its a series of bank defaults it will probably reduce BTC's price (at least in the short term) because people will simply have less currency to spend on it. If it involves the nationalization of pensions/IRAs/401Ks to prevent the defaults, or some kind of capital controls, and this is successful (at least at preventing widespread defaults) BTC could get a HUGE boost. If there is an inflation crisis, BTC could also get a big boost.

I have been thinking about this aswel.

Remember markets are not rational, I think if BTC is in a rally at the moment the stock market collapses, that the BTC rally will enter another bubble stage. If it's in a bear market, it will put further pressure on it.

As I shift into my final bear form to stave off this latest bounce, I should remind you guys that there is some very strong FUD going around right now that has nothing to do with bitcoin.

How would an upcoming U.S. (or multinational) economic collapse affect bitcoin?

Some of you may have been hearing all the theories within banking and foreign relations about an impending U.S. economic collapse which would result in a depression, a collapse of the U.S. dollar, civil war, and possibly even a Chinese takeover of the U.S. Also, it might not just be limited to the U.S. but apply to other countries as well all over the world.

If such an event were to occur, would bitcoin be a reliable store of value and what would it mean for the price of Bitcoin? Would bitcoin

A) Rise because many people are fleeing to Bitcoin as a store of value, such as with Cyprus and China. or

B) Fall in value due to a REDUCED demand due to:
1. People exiting bitcoin for more reliable stores of value such as gold.
2. Bitcoin primarily does business in the U.S. and primary trades against USD, which will both be crippled.
3. There will be no interest in speculative investments once people enter into survival mode.
4. The banking system may be disabled, leaving people unable to send money to exchanges.
5. The central banks may ban business with bitcoin exchanges such as in China or Russia.
6. The internet will be inaccessible.

C) Stay the same because bitcoin is now so popular all over the world that the U.S. doesn't really matter. Or some other reason (explain)

D) I'm a banker or government official and have recent updated information that there is no possible chance of an apocalypse. This is bogus.  (still answer A,B, or C hypothetically please)