Topic: If Recession Kicks In, How Will Bitcoin Perform? - page 4. (Read 1205 times)

Our government is starting to shift to general quarantine to which businesses are starting to open to operate. There could be a chance that we may save the economy from crashing if all will be fine.  But if the recession persists, we will be seeing more dumps to crypto because everyone will really be chasing the fiat they can spend. I wouldn't be risking keeping my coins as well while I have to buy stuff to survive.

^ Probably, but either bitcoin will get through or die it is still on our hand how will bitcoin survive if another great recession will kicks in for it may die if people won't be able to maintain their internet because of unemployment or probably the rise on the internet cost. However, if bitcoin will maintain its decentralized value then people may adopt bitcoin globally and it will suffice the needs on the market exchange. In conclusion, no one may presume on the future of bitcoin after a recession but with all the advantages that bitcoin has shown and proved us, I am positive that it will, probably not as fast as what everybody is expecting it may be in a slower phase yet bitcoin will still pull through.

I think there has a less possibility to happen another deep recession in 2020. It is right, world economy is walking in cripple because of locking down its leg. But now most of the countries are loosing its tight from the economy and economy is going to recover its own speed. So, crypto market will not face any recession and will continue to keep its full speed like now.

If you want to buy Bitcoin then you should just buy it and not worry about this. No one can really tell you whether Bitcoin can be affected by any recession, because we have not seen in it in the time of recession. When this pandemic started, some people called it an opportunity for cryptocurrency to shine but it ended up being the opposite of that and instead of cryptocurrency to shine as they have all predicted, it kept falling and lost value alongside the stock market.

We can't really predict it this time around, so all we can do is just wait till then and we will get to know what happens. Hopefully if recession hit us like 2008 scenarios then I guess both bitcoin and gold will skyrocket unlike anything else. I believe bitcoin is already into bullish mode which signals buying right now will not disappoint us.

The issue I'm talking about doesn't really pertain to banking liquidity. I'm talking about a deflationary economic cycle, not a banking crisis, although that is eventually possible too. In the immediate term, unemployment and lack of retail spending is a much bigger issue for both countries since both economies are heavily built on service sectors and consumer spending.

While the official Chinese unemployment rate is at 6%, more realistic analysis puts it closer to 25%.
https://www.scmp.com/economy/china-economy/article/3078251/coronavirus-chinas-unemployment-crisis-mounts-nobody-knows
https://www.statista.com/statistics/251380/number-of-employed-persons-in-china/

Based on unemployment claims (40.8 million claims vs. 164.6 million strong labor force) the US unemployment rate is likely also around 25%.
https://www.washingtonpost.com/business/2020/05/28/unemployment-claims-coronavirus/
https://en.wikipedia.org/wiki/Labor_force_in_the_United_States

This is Great Depression level unemployment. Since it has already been going on for months, and very few economists are willing to forecast a strong recovery, I am expecting a self perpetuating cycle where high unemployment drives down spending, which cripples businesses and results in layoffs and bankruptcies. It's mounting business bankruptcies and associated banking defaults (and also pressure from renter/landlord/mortgagee defaults) that could eventually lead to a banking crisis too, but that's down the road a ways, if at all. American banks are indeed highly liquid presently, although that can change relatively quickly in a brutal and prolonged downturn.


In some of the more grim economic scenarios, I'm skeptical Fed intervention alone will be enough, which I'm sure is why Powell is pushing so hard for fiscal stimulus from Congress. To his dismay it seems like Republicans have reached their political limits for fiscal stimulus. It's going to be interesting (and maybe depressing) to see how it all plays out.

High probability, yes.

In a recession, inflation tends to fall, and if (for example) the US inflation rate becomes lower than the BTC emission rate, USD would likely appreciate against BTC.

Perhaps what you were looking for is about hyperinflation?

Gold isn't stable too at some point, I don't directly mean price but what may happen around it, Crispin Odey said that governments may make private gold ownership illegal, so... Not good. Still curious, how are going to control it, but without doubt, it will affect gold's price. Executive Order 6102 caused rise in price but still who knows what may happen? May history repeat?

On another hand, as for now, bitcoin is doing well and it showed that there is light in it during such moments. Also + to this, bitcoin is part of modern technologies and innovative products and it always happens that finally, people follow innovations. Demand on BTC and blockchain technologies always rises and for a lot of people, blockchain is associated with bitcoin and opposite.
When something fails, people are always looking for alternative ways to escape. What healthy and wealthy alternative do we have? Bitcoin!

China's liquidity situation is IMO completely different from america's.

China constructs ghost cities with zero residents capable of housing more than 1 billion people to artificially inflate its GDP. Many of china's major banks have defaulted within the past 2 years. They have major issues with capital flight and their average appearing economic projections not panning out. Despite china adopting solid policy such as petro yuan for gold exchange, they still struggle with growth far more than one might expect for having a highly deregulated and low tax business environment.

The united states by contrast still has a central bank with liquidity which could be utilized to successfully stimulate markets. The polar opposite of china's situation.

In theory, china utilizes a "capitalist system". In reality, their approach is far more socialist with the state owning and operating everything. This heavily centralized approach could be reflected in chinese billionaire Jack Ma being forced to step down from Alibaba so that the communist party could take over. The state having to own and operate everything could be one underlying and neglected reason behind relatively china's low growth, innovation and liquidity.

The news media was cool with Elon Musk up until it was discovered that Elon Musk was a major donor to the republican party. Ever since then it seems as if everyone has been encouraged to publish a million different attack hit pieces on Space X and Tesla. For the crime of donating funds to republicans. (I think Donald Trump heard about hydroxychloroquine directly from Elon as well.)

You're ignoring the second half of that graph, and the point of the article. Producers can scale back up all they want but it doesn't mean consumer demand will return to previous levels, and that's the true driver of any recovery.

The stagnant Chinese consumer recovery is probably a glimpse of things to come in the west. High unemployment and economic fear is reinforcing low consumer demand, which will likely promote price deflation and cause producers to scale back down, which in turn will reinforce high unemployment......

Not that I take this too seriously, but I've seen some quiet speculation from people I respect about Tesla cooking their books. "The next Enron" they say. The SEC's open investigation into the company's finances, the unexpected need to issue $2 billion in stock for cash recently, and Musk's raging urgency to restart production, do smell slightly fishy all taken together.

https://abcnews.go.com/Business/tesla-discloses-sec-regular-financing-arrangements/story?id=68986518

You forgot that people tend to look for an asset to save their money. That means most people are looking for things that are easy to liquidate into fiat and the price wont really swing big time. You know how thing goes with bitcoin, we have suffered alot of big swing for years and alot of people stay away from bitcoin because of that

Its a fact.

We bitcoin folks are not even thinking of this. We have bear markets that made our feelings stronger so whether this potential recession comes and starts kicking in, we don't mind. If it affects bitcoin, we simply buy more. Bitcoin's resiliency won't make every bitcoin believer worry about this possible recession. It has been up many times after a big dip so if you are curious how it will perform, look at those bear markets and bitcoin can recover as fast as it can.

Depends on the level of panic I guess, just like the pandemic comes in to the bitcoin situation we have seen significant price decline for a long time but we also did see it rising just before the halving phase. Bitcoin as decentralized asset, there is no control in prices but it varies on the speculation which will be the basis of the price. So if ever the recession comes in, bitcoin will behave just as much the people behind it will behave through the recession period. Most of the time, As I noticed with bitcoin whenever there is a crisis it always stands out compare to other market and asset. Perfect example is the present time.

As all of the asset will ideally go down in prices, people would look after a better asset that time and I don't think they will be scared with bitcoin as it already earned so much reputation from its decade existence. I'll call that it will drop but will rise after, I'm not just so sure what is the time gap between that coz it might take a long time.

I think you are to optimistic. Covid-19 come few years to early for something like that. Bitcoin is not ready to be main payment system. So as none of the alts. Or all of them together. People definitely start to avoid cash. Also they shop more online. Move will be positive but we will not see a major landslide.

I think even the covid-19 situation has shown that there is no situation that humans can't adapt to. Covid-19 seem like war that is not fault by weapons but by medical facilities and prowess. However, despite the health problem, people have kept investing in bitcoin and price keep going higher and above $9,000 now. Recession isn't even lockdown which I think is harder to survive because it doesn't allow for open economic transactions and buying and selling. So bitcoin will thrive because transactions will freely take place, is just those who have money would invest. Bitcoin will still be fine I think so.

It does sound like there is no difference to old assets. I think its true that BTC price may drop but eventually go back up again.

I think BTC is going to be widely used because of the pandemic that's plaguing us right now. These days it is encouraged to use cashless transactions and although we haven't yet adopted BTC, we are already heading that direction. It's just a matter of time til we realize this current cashless system we use today is way problematic than using blockchain.

Bitcoin would probably go up but we never really can see the future on what bitcoin will do. For example on the pandemic we were all expecting bitcoin to go up instead of go down because its a store of value and people would want their money to gain value during something like that, but it dropped. Sure it didn't dropped too much and recovered faster than anything else, but is that enough? We didn't wanted something that recovers faster, we wanted something that went up instead of going down.

So with recession its the same mindset, when everything goes down in economy we want it to go up to show how its a great store of value, will it once again drop and surprise us? We don't really know. In the end the thing that will be most crucial is how people react on recession once again.

Well, on my own. The Great Recession in 2008 made a huge impact in the financial industry back then, --but perhaps businesses were still able to cope up in from these recessions and economy has recovered as what we experienced before the pandemic Now that the economy is going through on another downturn we cannot easily assume about the recovery and how it will cope up but one thing I am sure is that every individual will still their part to survive as the economy also depends on their citizens. Same as with bitcoin if a recession in the economy will kick it definitely it will also affect the crypto world. Indeed, I am pretty much sure that bitcoin will cope up may be slowly yet it will survive because bitcoin has already proven us its' capability to adapt to the changes in the economy.

Bitcoin was created during the aftermath of the 2008/09 recession, and I would to an extent agree, it was geared towards solving some of the problems faced in the banking sector which led to financial crisis that followed. I'll quote below an excerpt from the Bitcoin white paper;

---

Completely non-reversible transactions are not really possible, since financial institutions cannot
avoid mediating disputes. The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions,
and there is a broader cost in the loss of ability to make non-reversible payments for non￾reversible services. With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would otherwise need.
A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties
can be avoided in person by using physical currency, but no mechanism exists to make payments
over a communications channel without a trusted party.
What is needed is an electronic payment system based on cryptographic proof instead of trust,
allowing any two willing parties to transact directly with each other without the need for a trusted
third party. Transactions that are computationally impractical to reverse would protect sellers
from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In
this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed
timestamp server to generate computational proof of the chronological order of transactions

---

It was not created to save economies from crashes.
We should note that cushioning the effect of a recession and how bitcoin perfomrs during one are different. For it to cushion the effect of a recession, it has to have gotten mass adoption and become an accepted currency. If the global currencies are on a decline and stocks are falling, Bitcoin is going to be affected.

It will crash then slowly recover. Just like Gold. Stocks will recover way more slow. For Bitcoin will be just a normal time as it happened for years.

2008 wasn't staring in your face quite the same way this is. There was a vast amount of turmoil but whole industries weren't turning to dust in front of your eyes.

At the same time the elites are pulling further away from the little people than ever before and markets have less relation to underlying reality than at any other time. Many normal people did not benefit from the never ending stock boom of the last few years. That could repeat in an even more stark manner this time.

If more big money chooses to play with BTC it might latch on to that la la land.

Whatever happens the little guy is unlikely to be driving anything this time.