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

When the stock markets around the world started going down during the initial weeks of covid outbreak, Bitcoin followed the suite which means that it isn't yet strong enough to withstand the economic slowdown. It more or less imitate the market movements under such economic pressure.

As usual meaning staying at the same level? This isn't a usual performance by Bitcoin.
To me it looks like it's holding its levels pretty well despite the turmoil on Wall Street.

The recession is already in. Bitcoin behaves as usual. 

I think not. Because in this crisis moment more people engaged already with BTC and gradually they going to trust on it. You see in this crisis moment where people thought that like fiat market, BTC market will also down but that not happened. So i think there is no link or effect with normal recession to BTC market.

thanks.

I don't think Bitcoin go down with the global market. I was deeply concerned in the month of March when the pandemic showed its great devastating power and the price of Bitcoin dropped to ~ 6K. However, today Bitcoin has remained resilient at 9K.

If we are going to see banks collapse or at least something same like Lehman Brothers Bitcoin is going to surge again.
The recession that we are going to endure during 2020 sadly will not have any impact in Bitcoin adoption.
Those two recessions are totally different to each other and there is a different income losses in those two occassions.

Traders can make more money but its only for short term, if we calculate the total profits of a trader and a holder in long term then we an get the similar figure for different extreme of efforts.

Recession usually brings in inflation, there is usually a printing of money which already happened with 4.4 trillions printed and that equals to people spending that a lot more abundantly and somehow getting everything else expensive as well. Now if the dollar becomes less valuable and price of one apple moves from 1 dollar to 1.1 dollar, do you really think that wouldn't affect bitcoin as well? Bitcoin will move the same way.

The difference is, when you decide that from now on apple should be 1.1 dollars, you do not take it up or down once again for a while unless something changes. On bitcoin world the price goes higher and lower all the time. So even if dollar becomes less valuable, bitcoin will be $5k, $10k, $15k, $20k and even more who knows, it will keep on moving up and down all the time because it is volatile.

Bitcoin will not be affected that much by the recession, maybe when you convert it to your fiat then that will be a different story, the good about bitcoin is that it is decentralized thus making it almost immune to state's financial problem, if you were to pay services and goods with cryptocurrency then you do not have that much of a problem but in the long run, this is not beneficial both to bitcoin user and bitcoin itself, if you are just a consumer and you are not getting payed then there will be problem, maybe the people will be the most affected but not bitcoin itself.

recession or not its always possible to profit in bitcoin , its like saying its possible to profit in btc no matter what its price ( up or down  )   . the risk in investing on btc isnt high but that it can be high or low depending on how much money you put it in or depending on your knowledge in this market  .

demand for btc never decrease because  let say if it decrease , price will drop and many people will enter again seeing the price low  . halving is also already over but price were still same  .

If there is a recession it is possible to make a profit even if there is a high risk in Bitcoin If the impact of the recession is on the crypto market later and the demand for Bitcoin decreases there will be a higher risk. It is difficult to say what the recession will look like next but even if the recession does occur, the price of Bitcoin will not go down Bitcoin is very unlikely to fall in price for this near Halving.

But traders carry significantly more risk than those who just hold coins. And if there is a high risk, then there must be a high profit. And for a trader, it does not matter what the market value of BTC is today. Thus, bitcoin is a tool that allows traders to earn profit on its volatility.

If traders are making more money than the holders is not really a good for the future of it, high volatility can be profitable but it won't let the prices to move from certain rage like how we stuck in 10K for too longer just because of traders greed in making profits in short term.

The price of bitcoin will not depend on what is currently happening with the economy. The volatility of bitcoin will remain high, so we can expect that the price will continue to move in a large range.And this volatility will help traders earn money in such a difficult time.

Not sure if I understand it correctly. But first of  all everyone should store his bitcoins securely. With only a few hundred bugs, its fine to use an online wallet. But if you own a substantial amount of Bitcoins (> 0.5) I would not rely anymore on online wallets. Security is king if you  want to keep your bitcoins, but this will of course not protect to you from falling princes.

If you are actively trading with fast reaction times it might be worth to sell some of your holdings in a general market sell off. If  the recession will kick in, we probably see falling prices across the all asset classes. In the long run prices will rise again as always in history, I would make sure to invest again if you find decent levels to buy.

In my own opinion the performance level of Bitcoin is technically very slight but it seems like deep sea to know one can directly touching and attainable in which is ready for any basic recession.Even this digital technology are still young to any transaction,I respectfully believe that no one can kick out anytime or abandon.

You just keep on holding it if that happens.

I just hope that the price of Bitcoin will not be affected or may be affected slightly by it. Some of the users already needed it so that they could use it to buy for some essentials especially after the lock down and after the quarantines that happened.

First of all, you need to protect coins from falling prices, inflation, and volatility. Now many wallets offer secure staking, exchanges too. You can still consider the option of structured deposits.

IMO the main problem for the bitcoin to act as a "reserve asset" is that currently the bitcoin has quite high returns. If something has high returns people will want to buy it to benefit from these returns. Gold on the opposite side, has little return and volatility. So people will not buy gold in booming economic times simply because it is easy to buy better performing assets. So price of gold will remain stable (maybe even lower a bit) until trust on the system (and returns) is lowered.

Previously i used to think that the bitcoin market always do reverse of the financial market as there were many instances to support this theory, but with time this proved wrong and now it mostly does the same what economy is doing.
Even at the start of this pandemic the price of bitcoin crashed along with the stock market globally in a matter of hours. So i guess if the Recession kicks in then the price of bitcoin will also fall just like everything.

Well I guess Bitcoin will go down along with other assets. Bitcoin can not stand in front of the wave of sellers. People will sell everything to buy gold or at least real estate.

Covid-19 can be considered as a type of recession. However, its no big as the 2008 recession. The reason is that the world is become more connected and more developed. People from around the world are working together in a same markets which provides a huge liquidity that make the economy even stronger. Therefore, the world is recovering very fast although the disease skip spreading in the west. China is the culprit who starts everything but right now, they are dealing very well and making the world economy restored.

There's so many option which people can go like gold or other stable forms for their investments but since we are in digital age nowadays and bitcoin has been created then this is the best option for people to get a relief from crisis, we all know how good it is interms of profitability and provably many people will find a good ways to earn by using it.

I think I would expect the first one will happen, when fiat fall people will look for an alternative to hedge their money and I think bitcoin has a big role for that. If we haven't seen it at the moment, then we don't see the value of bitcoin and we will not believe bitcoin will not gain more demand in the future.

As for me, I believe bitcoin will save the collapse of a certain countries economy because bitcoin is a worldwide coin that is not tide with any country's economic performance.

While Crypto is independent from government yet recession may affect the market though in 2 different ways.

It can Help the Use or utilities of crypto as Fiat will have lower value.

or

It can bring the market fall because of withdrawals and panic of the people.

It will be depending to what is the impact but hopeful  that Positive things will come our way,because i believe that Crypto is designed in this kind of crisis.

Bitcoin is usually born to overcome the recession The country's economy is suffering due to the recession the number of unemployed is increasing and everyone is living a helpless life In that case if we save for the future it will help to overcome evil. Bitcoin plays the most important role in overcoming evil Although the price of everything has decreased the price of Bitcoin has not decreased much If we invest in Bitcoin and keep it we will get a lot of profit in overcoming evil The effects of the recession will not fall on Bitcoin.

If a recession kicks in, Bitcoin might be affected and the price might reduce to a low. Some people are already saying that since after the last Halving which took place in May, the cost for mining has increased and that might be making Bitcoin vulnerable to a deep correction. Imagine when there is a recession and some miners don't have money to keep up with the mining process due to the recession, they might actually and that will affect the price of Bitcoin.

There are already some that are dropping or dropped out. Though one thing I always believe is that if Bitcoin falls, it will always go buying dips as long as I have some money left after covering my life's expenses. Keep buying at dips is the strong strategy I do follow for years and I am profitable with that.

Then I sit back and get ready to listen as you tell me how new people get at least to the btc market (which is only part of the crypto market) without the Fiat currency. I will also be happy to hear the answer to the question "why would new people come to the btc / crypto market if not for the sake of increasing their fortune in fiat".

Not just that they don't understand , and maybe they do, but they can't afford to risk that much and lose a bit of money that they actually don't have enough. So, this is not likely scenario.
Besides, traditional economy and financial system and Bitcoin market are not directly connected so we can't say what exactly will happen when full economy crisis starts, there is no good prediction for that.

So, poor people will keep btc from falling sharply? But they will not keep it from falling slowly, and it is unlikely that "poor people" will invest money in something that they certainly do not understand.

Lol you're asking what will happen to Bitcoin during a recession in a Bitcoin Forum? What are you expecting? You will still get a positive answer. For me I would say that we shouldn't let things like this determine whether we should make use of Bitcoin or not. If you want to make use of Bitcoin and you believe in it, then make use of and stop worrying much about things like this. They will all come and pass and Bitcoin will still be here.

It's true that when they happen the price of Bitcoin will decrease, that's for sure, but it still wouldn't take time and it will go back up. You can use what happened during this pandemic as an example - the price fell to a low range, but after a short time it still catapulted to the top.

Until now bitcoin is resisting from going deep down, it went down for a while but it got recovered in no time.We can't say what will happen to bitcoin's price if we are going into a depression state but it will helpful for more people to adopt because now we have a solution for these centralized shits.

I don't think bitcoin will fall immediately and/or significantly, because it is the safe haven for a lot of people from developing countries.
So at the point when economy of developed country will be in danger - btc will be supported with money from poorer people out there.

Wake up buddy, this is the year of halving and if you think that the price would go down then you are not looking at the charts properly. This was the third halving and if you did not identify what happened in the past two times then you are missing out on the market situation.

Watch out for the market this year and i hope we will not see a big recession this year as it could affect everyone and bitcoin will not be an exception. I want to see the rally as usual and then i can take a hit after that once i sold all the coins .

In a case of financial unrest or a recession the price of bitcoin should rise as people would try to find new ways to park their money and also that should be having high liquidity, and people seem to have slowed down the purchase of gold now, so I think they will look towards bitcoin for safe heaven and invest in cryptocurrencies.
In a case of a recession every fiat currency will loose its value but it will not be the same with cryptocurrencies as they always perform inverse of stock markets.

At the time of its appearance btc was something new and unprecedented but now the maximum that can we hope for is growth due to a lot of new users who will want to buy a ticket to the moon in the middle of all this depressive crisis.
If this does not happen, then Yes, BTC will go down as well as the rest of the market because people will not have money and absolutely will not want to try to make them on risky investments (and for most people, cryptocurrencies are just risky investments)

I don't think it's going to happen, if Bitcoin was made to cushion recession then there is no recession strong enough to defeat Bitcoin, in fact right now we are now in the brink of recession, but so far market is performing better, better than what we expected because Bitcoin was going down before the start of this Pandemic, so far it's as strong as ever, thanks to the strong support of the community.

Cryptocurrencies' price will obviously fall.

We don't know how low and that also includes Bitcoin since we are talking about recession. This pandemic is really hard and a lot of other things can also affect the price and not just the recession. 2020 is just a disaster for all of us, a lot of things are happening and it might continue to surprise us this in the coming months and I think the price of Bitcoin will be affected. But we don't need to worry since there will be a lot of people that would be taking advantage of that fall, it will quickly go back.

Gold didnt crash in 2008, its unlikely either asset pulls back in a serious way as even in recession there is a loose monetary policy that is hard to reverse right now even if recession occurs in business growth.    A proper contraction in the economy is usually associated with a hard money scenario as monetary velocity reduces.   If bonds fail to pay off and default that would lead to contraction in money supply, I doubt this would occur on average right now as so much debt is contained in government bonds which are not likely to default.   Japan is a good example for all of this as they have been running QE since 1990's and has yet to repay the bonds or allow any contraction in monetary base.
  I dont see BTC pulling back over a very long term view so long as the easy money policy continues.

@OP,
I seen reason for Bitcoin not to outperform every single asset out there and while you're asking how it'll perform in the future, just see its latest formation and you'll understand. The Corona pandemic broke down BTC to a new fresh low this year at around $3700 but it rebounded so hard and the % of that rebound is, by any means, extremely higher than any sticks available in any sort of markets. I believe that BTC may see a correction, a steep correction before getting higher once again (I mean BTC is yet to get down more) but it'll definitely survive the upcoming recession (if it ever takes place) due to the fact that BTC has least market capitalization compared to big players as of now, and it won't be getting vanished out of the markets anywhere.

The word safe in terms of asset is not as assured as we use them, that only means that if we are talking about assets some of them are considered safe as the word itself means "low risk". So the question, is there a safe asset? YES there is. However on the case with bitcoin, it is not safe at all coz in bitcoin what you need to invest first is the trust of yours, before the money as you have said there are people who are dumb investing when the price is already at the peak. Just imagine a scenario where a friend of yours climb on a mountain then they invited you to join but you refused, the next day you'll see their picture posted on the internet, you see their lovely faces with joy at the peak then you decided to go alone, you bumped to your friends while they are going down, then it rains. Regretting isn't it?

I must say other than patience, one vital key is the trust. It's better to try than to feel sorry.

A recession is a collapse, no asset can get away with it even bitcoin, wait who knows what will happen with bitcoin? no one does.

There is no asset in the world that is safe if you are dumb enough to invest at its peak and that is the case you are talking about, if anyone invested in bitcoin when the price rallied and reached its peak, who is to be blamed. Is there any asset in the world that is safe from that ? .

In the case of bitcoin everyone had the opportunity to invest in it when the market when down and if you were not smart enough to invest at that time then there is no point in complaining about it.

If there is a recession then no asset is same from that situation and that includes bitcoin.

LOL... It sounds like a poem to me. Well, I am optimistic as you mate

In a typical recession the price of Bitcoin is going to fall because people will sell their coins at such times. Just like someone said, Bitcoin thrives during crisis but you have to beware of recession. Bitcoin is a volatile asset and I don't think people will be buying something that goes up and in the next minute it's crashing.

Investments wouldn't be a thing for most people, they will be selling to fiat so they can be able to deal with some challenges that comes at the time. But a recession won't cause an end to Bitcoin, in fact such a time would be the best time to start Bitcoin after the price has dropped to a very low, because after everything it will still go back up.

There has been something like $700 billion made in small business loans via the stimulus bills, and likely more to come in the next round. I'm worried about the amount of debt being taken on in the case that business owners can't meet the terms for forgiveness.

May unemployment data gets published this Friday. Goldman Sachs' latest estimate for May is 21.5% and while that number could be falling as states reopen, I wonder if it will fall far enough and fast enough to prevent this sort of cycle:




China is doubly screwed because slow recoveries in the West means weak demand for Chinese exports. In the end, both countries are completely dependent on a strong consumer recovery.

I'm eager to see incoming retail sales data. These nationwide protests and riots can't be helping. They are keeping businesses closed, not to mention curfews being implemented all over the place.

The best method of economic recovery AFAIK is empowering small businesses. Start ups and small businesses account for 50%+ of new job creation and is the logical market to tap. The main requisite required is liquidity. If the government truly wants the economy to recover they'll mandate loans with excellent terms for small businesses, coupled with tax cuts/incentives to boost economic growth. This will delegate the problem of economic stimulation and job creation to a high number of intelligent, resourceful and innovative individuals.

The united states is definitely far better positioned than china to architect a successful recovery. The only question is whether they'll implement the "common sense" policies they claim to support and habitually do the complete opposite of.

Don't you think the safe-haven narrative of Gold is beginning to rub off on Bitcoin? People are beginning to perceive Bitcoin as a good hedge against currency devaluation.

I am hoping for bitcoin going up, whatever happens. Like recession kicking in, recession not kicking in, money being more valuable, money being less valuable, goods not being available, or extra manufacturing when this ends. I do not really care about anything but just bitcoin going up. I just hope whatever that will help bitcoin going up, end up happening, I don't care what it is in the end because I am heavily invested in bitcoin and if worlds going to burn when bitcoin goes up, let it burn.

I am sick and tired of trying to do the right thing and trying to think the right way, I have done that all my life and somehow people who are wrong about the economy, who are corrupted, who are bribed all got away with their way, its my time and I want my share of the pie now.

I don't think this is entirely true. Some people will certainly sell bitcoin because they won't have income due to the possible recession, but I don't think they will buy gold or silver. People will probably sell BTC to pay the bills. But I also think that cryptocurrency prices will drop if a recession happens.

Here is my take on this - In case a recession occurs, we can expect Bitcoin exchange rates to plummet. It may go below $3,000 per coin (the lowest levels we had during the last 3 years). Because when the economy collapses, people are likely to go for stable assets such as gold and silver, which can also act as a store of value. High risk assets such as cryptocurrency will have few backers then.

From the experience what I have learned from the 2008 recession, I guess bitcoin will become more attractive like gold if there is a recession kicks in. Before analyzing about how bitcoin will perform, it would be much better to understand what is the recession and what are its consequence on our day-to-day life. Recession is nothing but economic slowdown which means corporate will not get enough orders and they will go for layoff which will end up in more unemployment. When people are jobless, their buying capacity will be low which will again induce more economic slowdown.

So, stock market may not perform well which will enforce investors to go for other opportunities which means they may look for bitcoin and gold. It means money in-flow will switch over from stocks and government bonds to alternate investments like bitcoins. So, bitcoin may have big value but we may need to pay higher rates for our daily needs. Because usually recession will end up in costlier food and services.

It is going to be bullish of Bitcoin because the financial world is going to tremble and it is going to change after the coronavirus crisis is over, there were already various gaps in the industry. This has only worsened it more.


This is a shame, what is happening but then we need to understand that everything happens in the world for a reason. Bitcoin goes down for a reason, that is market sentiment and market behavior because, in the end, Bitcoin is also like a living person. It is here because we want it to be here as a beacon of hope against the banks and the corrupt but it is all complex world of life that we live in.

this one is quite close to my opinion
I would add one thing - after 2008 recession bitcoin was innovative and came from unexplored internet.
Now we do live online and most of people are quite comfortable to hear such words as blockchain, mining, crypto, bitcoin and etc.
so It won't be as bullish as was before, but I won't believe it will fall because of current recession
time shows one pattern - people will to save their funds so they buy crypto instead of fiat

The crisis 2008 was a financial crisis, spreading around the world through the banking sector. Triggering a flight to safety with investors selling risky assets across board for government backed assets.

The crisis we are facing at the moment is affecting the hole world but directly hitting different sectors than the 2008 crisis. Commerce and Tourism took immediate hits with the lock down. Which is spreading through the economy much faster than in the previous crisis.

People lost their jobs within weeks of the lock down resulting in an overall drop in demand. And since the governments are in printing so much money now to desperately saving big companies.

I don't think investor will sell off their risky assets.  We will see people not investing in risky asset for a while, which means also no big rise in bitcoins. But I also think that people will not sell their BTC holdings.

For this year I believe the BTC price will just stay on a similar level as in the last weeks.

Contrary to what news and media is saying I do think recession is already here.

It's here for the people who have lost their jobs , it's here for the people who are eating only one meal a day and it is here for one's who cannot afford their next meal .

I do not agree with the definition on Google * a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.*
I do know that recession is something that affects everyone individually.

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Back to your question.

I do think Bitcoins is doing amazing when it comes to people and the jobs it's offering them .

It definitely have earned respect on various levels , well at least for me. It's enabling people to trade , to send money with the safety of their homes , the Campaigns are providing job opportunities for a lot of people, the bounty Campaigns are actually replacing full time jobs for some.

For students like me , it's a blessing, with not much time to invest in part time jobs , Bitcoins have greatly helped in earning a little extra.

I have seen managers going around and helping people. People making donations, people doing a lot of good in the community.

I do think it's already preforming better than any Currency I know of.

Let us hope it grows in the upcoming years more and more.

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It will be difficult for all of us to guess how Bitcoin and other cryptocurrencies will behave. Whether they will pay attention to cryptocurrency or investors will not pay attention. Do they want to develop this topic in general, but I don’t think that everyone will forget about Bitcoin, it would be stupid.

I think Bitcoin, cryptocurrencies or any other financial instrument is a product of the oligarch - those who hold 90% of the world's total assets or we are known as the rothschild family. It is a tool for them to make money. We also cannot deny the power, superiority, breakthrough of Blockchain technology, about its benefits. I think that is the value of Bitcoin, not the value of money. Bitcoin or crypto was born to replace the current money system, bringing fairness and transparency to money and finance. But think about it, we live in a world where money is power. The more possessions you hold in your hand, the greater the power. If a country has monetary autonomy in its hands, it is a very powerful nation. So, how does Bitcoin or cryptocurrencies - things that provide decentralization (rather than centralization), transparency, and equity - can replace the current currency - which will bring power to itself covered. Therefore, I believe that in the future, cryptocurrencies are still just a tool to make money, not a substitute for money.

Global recession is already manifesting with most of the powerful countries struggling to put to shape their economic status. This is largely due to the slowed production, huge lay offs across the world, lockdowns and quarantines, illness and death of the workforce etc. Amidst this recession, Bitcoin is already performing well by keeping a good trend on the market now.

It really depends on the situation of crypto user. But I believe most small time crypto users were and are already cashing out some of their stash to address their basic needs. And since countries are starting to loosen up from their restrictions, we will see the economy to be alive again, though not really the same as before but it is good to see the slow pace of opening up of economy of many countries. I think bitcoin has already surpassed a lot of recessions already and still standing on its ground, so I don't think another recession will crumble bitcoin.

Retail always has a role to play with such an illiquid market as BTC.

My opinion is various Wall Street entities (mostly hedge funds) are accumulating, and probably have been for 1-2 years. They buy up supply throughout the sideways bear market, then once supply in this range is dried up, they mark up the price into a higher range (> $10.5K, > $13.8K).

Historically this is where exchange supply begins disappearing as holders begin anticipating a bubble. At this point, those Wall Street accumulators won't be buying. They'll be waiting to distribute. It's retail FOMO investors that will be increasingly driving the market and crazily enough history shows they can.

As important as demand is to market bubbles, weak supply is the determining characteristic of BTC bubbles. Even under normal circumstances, only a small fraction of the 18 million BTC in existence ever hit exchanges, so when everyone is refusing to sell, the sky is the limit.

Amidst the ongoing pandemic, Bitcoin seems to be the best performing asset so far, don't you think the safe-haven narrative of gold could also be said of Bitcoin?

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.

I am not sure if a commodity-backed cryptocurrency could be a reality in a trustless manner. If it could, it'd be awesome imo. But the separate investment in gold & silver has its beauties - you do not get that feeling of holding a beautiful coin in your hand with BTC (there are physical BTCs, but that still doesn't make BTC be 100% physical).

I'm not sure they could outshine Bitcoin, for example. The way I see it, it's going to probably remain the king for a very long time due to the fact that it's been proven to work as it was intended to and it's been successful through lots of different attempts.

In a crisis where barter becomes a thing and internet connection is still affordable, Bitcoin could thrive easily due to its transparency and immutability. Gold could be faked, you'd have to trust someone else's words as you can't check whether the coin is 99.99% gold or not. I don't think backing a crypto with gold would give it many advantages overall.

---

Here comes the problem: that is only if you already have the knowledge inside your head or bought the necessary stuff. But in case of an internet outage, +95% of the people wouldn't have any option to make use of their coins. If internet fails, people will probably have way more important things to care about than purchasing bicycle generators.


So after 2 years of having no internet, would you trust the blockchain you'd get connected to? Would they trust us? Because at one point, someone could maliciously revert the blocks to their own advantage and give you a connection to their own version of the blockchain.

What if someone uses a device offline to send you 10 BTC and then goes to a place where there is internet connection and sends the same amount to a different address, but online and from another device? You would have no idea their BTC were double-spent and once the blockchain goes live.. oh well, your 10 BTC would become obsolete.

Source:  https://www.nytimes.com/2020/05/15/business/china-economy-coronavirus.html

....

There are claims china's factory output is returning to normal. Elon Musk appears to have confirmed this to a degree. Musk claims tesla has 7,000 employees living in china with not a single one of them having issues with corona virus. He also claims factories in china, which tesla relies on to produce parts, are supplying at their normal output.

We may still have a shot at a quick V shaped recovery.

Bitcoin has been very unique, it's very volatile, unpredictable, and it does not correlate with the economic status, so if the recession will kick it, I'm thinking that the big capitalist will invest in bitcoin and consider this market as a hedge for the value of their funds, bitcoin is going to be a safe haven for them.

Therefore, I think bitcoin will rise in tough times.

The recession already kicked in and it will continue "kicking" during the next few years.
Nobody can say or predict how Bitcoin will react to this recession.If anyone could predict this,he can become a billionaire.The investors might run away from risky assets and start buying more gold.Bitcoin is considered a risky asset,so I don't think that most of the investors are going to be willing to buy more BTC.
For me,the most important thing is that the Bitcoin Core blockchain will survive in the long term.
The BTC price goes up and down every week,so long term predictions are impossible to make.

The looming crisis is just around the corner, almost all of the economy around us are in the brink of collapse like the US. And there are predictions that it will take like 5 years for their economy to fully recover and restored pre Covid-19, but it is debatable though.

Regardless, crypto assets will still be there as an alternative to precious metals like Gold to be a hedge against this financial collapse. And this is another good test specially for bitcoin if it can hold the supposedly Gold 2.0. But we can't really tell at this point, but so far we have passed the test already and we have seen how resilient bitcoin is, so there a good chance that we will survived in another global meltdown happen worst than 2008.

Bitcoin will follow the stock market, as it did in the recent pandemic-related crash.

That is, every market crash will have a corresponding bitcoin crash. They are correlated, as bitcoin is being traded without the speculators having it, and the exchanges are allowing these trades to dictate the price.

Our only hope for cryptocurrencies is if ethereum, ripple and monero unpeg themselves from bitcoin. Ethereum is a utility coin, ripple could help the banks, and monero could protect the citizen against the rising technocracy, as it values anonymity.

However, it will be hard for these currencies to unpeg from bitcoin. Maybe projects related to debit cards could help with it. But we still have the exchange problem, since the exchanges are allowing for the bear market to endure, by not implementing circuit breakers in their books. I believe they have a veiled interest in extrapolating the speculation, since this could also lead to a bubble, which would be good for them. But this hurt the technology and its applications, as a replacement for fiat money.

Then you have the network issues. The bitcoin-qt software takes up to five minutes just to start. A transaction in ethereum last one second, whereas with bitcoin, it takes up to one hour, paying the maximum fee. The forks are even worse: the only transaction I did with BSV took more than one day, paying the maximum fee.

It is old tech, and the price is only high due to market speculation. In fact, if there is a worldwide EMP attack, bitcoin would be one of the first to fall.

During past EU bailouts of greece, there were fears the EU would collapse, and the euro would implode. Europeans rushed to exchange their euro fiat for gold and precious metals. In some cases, they impulse purchased big screen TVs and retail items they expected would retain their value better than an imploding euro.

If a deep recession sets in, accompanied by fears of default or hyperinflation. It is possible we'll witness a similar mad scramble. Consumers could rush to exchange their fiat for gold, precious metals, bitcoin, whatever they can get their hands on. The value of bitcoin could soar if its viewed by the public as a safe haven from hyperinflation, should circumstances and government balance sheets deteriorate.

It all depends on the sequence of events leading up to it and how circumstances unfold. We do know many large banks are currently holding bitcoin and cryptocurrencies as a hedge against hyperinflation. Its plausible global economies will follow suit and officially recognize bitcoin as a recession safe asset, similar to the role gold has enjoyed over the years.

After ten years, Bitcoin has proven itself that it can adopt any situation like this pandemic and any recession, in fact Bitcoin will be bullish in this recession, because people are going to move on Bitcoin being a more established market, there is going to be recession there's a big possibility because of the pandemic, all countries are spending a lot of there are a lot of workers losing their jobs and companies closing.

some prominent investors/analysts (paul tudor jones and raoul pal to name a couple) think the crisis and potential inflation from all the money printing is bullish for bitcoin.

i wish i shared their confidence. the economic situation looks dire, and just based on the correlated crash in march, i'm feeling pretty nervous for bitcoin. the next leg down in the stock markets could be just around the corner.

If the current internet fails(localized failure esp) , we could use Bitcoin in ways listed here: https://bitcointalk.org/index.php?topic=2183740.new#new


I find local Blockchain/Bitcoin interesting (not in that links^ page). It should be possible to build something that can be used locally and later sync with World's Blockchain whenever there is internet. Whether it takes 2year to find internet for synching shouldn't be a problem as long as the data is well decentralized, fool-proof, secure etc

Another interesting idea is to create a physical Blockchain/decentralized-system that is totally independent of the internet.

In my opinion, I guess Bitcoin will not be affected by it.

There are a lot of times that Bitcoin stayed normal despite the pandemic and other things happened. There are some irregularities I guess so that also adds up to random movements and might affect the price negatively. For me, it will not be affected just like the time despite the pandemic happening.

Hard to say as this is now the first time we're going to see if Bitcoin's theoretical hedging function works in practice.

Unlike gold it's not really seen as a stable alternative yet but this perception is likely to change after 2020 -- for better or worse. This will largely depend on how much Bitcoin's price movements will correlate with the rest of the classical market. I'm not sure if you currently can make a strong case for either. On the one hand Bitcoin dropped more or less in sync with the stock market, on the other hand it seems to have recovered much faster.

Regardless of that -- with fiat currencies inevitably devaluating more than usual over the next few years due to governments stimulating their economies with monetary injections I do believe having a position in Bitcoin might be smarter than having none.

This is a really great insight Kelvin, "the 2008 recession has redefined the financial industry. This one will redefine the way we live", this fact is already becoming a reality.

Again, what do you think about commodity-backed cryptocurrencies, maybe a silver-backed, gold-backed, a cryptocurrency backed by a basket-of-goods? Do you think they can outshine other cryptocurrencies that are only based on mere fundamentals?

It's not going to be "just another deep recession". If you think what happened yet in 2020 wasn't enough, you're right. We're at the edge of a very tall building that is bound to collapse, which is basically the economy.

What happens to BTC will remain to be seen. In the ideal case, people wake up at the perfect time and put their money in something that doesn't artificially inflate like nuts every few weeks/months and doesn't lose value over time. At this point, I'd honestly believe in any asset, be it virtual or physical. If I ever have the opportunity, I would kick fiat out of my world in no time and use only BTC, gold and silver for the rest of my life.

By the looks of it, we're sooner or later going to enter a very, very bad economical situation. We'd probably wish for a 2008-like recession. The latest USA unemployment figures doesn't speak enough words anymore - it's starting to scream. If that wasn't enough, it's happening everywhere. I'm a very long distance away from the USA, yet we have a similar (possibly even worse) situation here.

Bitcoin will either survive or not. This entirely depends on us and on how we use it. If tomorrow the internet somehow falls in a country or enough people will remain unemployed for such a long time they won't be able to afford electricity & internet bills, expect huge FUD and a radical price decrease. Anything could happen. Comparing it to the previous recession, you had BTC go from nothing to $1,2k in a matter of 5 years (2008 - 2013). If history repeats, then Bitcoin will literally go nuts before 2015. But I'd rather follow a more realistic scenario.

The health crisis is quickly fading away and don't you think it's going to stop there - this was just a beginning. I read somewhere something that really made me think: the 2008 recession has redefined the financial industry. This one will redefine the way we live.

These drastic changes in the way we live will stay for a very long time. For some (probably many, actually), it's going to be a trauma.

Hello Everyone,

I guess I am just being curious here. Bitcoin was born after the 2008 recession in which many Bitcoin loyalists have argued that Bitcoin was born to cushion the effect of a possible future recession. What are your prediction and analysis concerning the digital asset if for any reason we witness just another deep recession in 2020? Will Bitcoin go down with the global market?