US potential Recession and its effect on Cryptocurrency - page 2.

squatz1

legendary

Activity: 1666

Merit: 1285

Flying Hellfish is a Commie

Quote from: exstasie on April 13, 2020, 04:53:42 PM

Quote from: jackg on April 13, 2020, 11:39:45 AM

I think there are two mine ideologies with crypto:
1. It gets treated like cash
2. It gets treated like gold

If it's treated like gold we'll probably see quite a fall when the recession hits
If it's treated like cash, cash is seen as a bit of a guarenteed investment so bitcoin will be in good steadings...

Why would the market ever treat BTC like cash? We can already rule that out based on the 64% crash last month. In a liquidity crisis and recession, people obviously dump BTC for cash.

It's not treated like gold either. Gold only fell 15% and is now trading higher than it was in February and March. BTC dropped 64% and is still down 35% from its February highs.

The market obviously believes BTC is much, much riskier than either cash or gold. It is its own asset class, a very risky and experimental one.

Ah, this is one of the first times that I've found someone that talks similar to me.

You're without a doubt right. In the event of a crisis where people are losing their jobs, retirement funds are crashing in value (not too bad with the markets recent rally, but still), tenants (residential and commercial) stop paying, and so on -- PEOPLE ARE GOING TO SELL OUT OF THEIR SPECULATIVE INVESTMENTS FOR SHORT TERM CASH.

Maybe a few years ago this wouldn't be the case, but bitcoin is more speculative now.

exstasie

legendary

Activity: 1806

Merit: 1521

Quote from: jackg on April 13, 2020, 11:39:45 AM

I think there are two mine ideologies with crypto:
1. It gets treated like cash
2. It gets treated like gold

If it's treated like gold we'll probably see quite a fall when the recession hits
If it's treated like cash, cash is seen as a bit of a guarenteed investment so bitcoin will be in good steadings...

Why would the market ever treat BTC like cash? We can already rule that out based on the 64% crash last month. In a liquidity crisis and recession, people obviously dump BTC for cash.

It's not treated like gold either. Gold only fell 15% and is now trading higher than it was in February and March. BTC dropped 64% and is still down 35% from its February highs.

The market obviously believes BTC is much, much riskier than either cash or gold. It is its own asset class, a very risky and experimental one.

jackg

copper member

Activity: 2856

Merit: 3071

https://bit.ly/387FXHi lightning theory

Quote from: Sanugarid on April 13, 2020, 12:22:14 PM

Quote from: jackg on April 13, 2020, 11:39:45 AM

I think there are two mine ideologies with crypto:
1. It gets treated like cash
2. It gets treated like gold

Cash and Gold, never gets old. Most probably bitcoin is treated that way because it can be both, a currency and a store of value, maybe that is why crypto is in demand right now. I like seeing people having it as both it feels like we are getting much of what we wanted in the first place, we didn't even ask bitcoin to reach $20K right? Or did we?

Quote from: jackg on April 13, 2020, 11:39:45 AM

If it's treated like gold we'll probably see quite a fall when the recession hits
If it's treated like cash, cash is seen as a bit of a guarenteed investment so bitcoin will be in good steadings...

I think if people treat bitcoin more as a gold then probably there would be a higher price resistance because in times like this people are fearful and they are more likely to hoard it. Otherwise, if treated like cash (assume that we already have plenty of merchant accepting bitcoin) people holding bitcoin would not hesitate to spend it no matter what the price is.

I also forgot that unlike gold, and like currency, bitcoin is divisible.

People might want to go into it when there's hyperinflation in their current currency since it can be decided for things like croceriea and electric, they don't need some sort of token or to try to melt down gold into smaller grains...

Harlot

hero member

Activity: 1806

Merit: 672

Quote from: jackg on April 13, 2020, 11:39:45 AM

I think there are two mine ideologies with crypto:
1. It gets treated like cash
2. It gets treated like gold

If it's treated like gold we'll probably see quite a fall when the recession hits
If it's treated like cash, cash is seen as a bit of a guarenteed investment so bitcoin will be in good steadings...

My guess is it won't be neither of the two but if you simply mean Bitcoin being treated as "gold" to an asset then you are right. In the first place most of us here involved in the crypto industry treat Bitcoin as an investment and not some other alternative for payment, even if majority of the hodlers are using Bitcoin for payment most of their holdings are still intact hoping for it to grow. We all know that during a recessions all assets are vulnerable to drops and that includes real estate as people are liquidating their assets for money due to financial losses from lost of jobs to businesses. This is what will happen to Bitcoin if they predicted the recession correctly, we all see how the markets reacted to the COVID-19 pandemic, I believe it would be nearly the same when the recession hits us.

coinfinger

sr. member

Activity: 1638

Merit: 278

US economy might go into recession but I am not going to say that bitcoin will be affected. The price of Bitcoin might continue to increase despite whatever is going to happen next. By then many people will start to invest their money in Bitcoin and running away from fiat, causing even major crashes on fiat, while the cryptocurrency market continues to boom.

Even right now if you check some exchanges you will notice that the rate of buying Bitcoin has increased more than the rate of selling, showing that more people are ready and believe in bitcoin as their safe haven.

TIDOVEE

sr. member

Activity: 1246

Merit: 255

If we think any recession in the US will have a noticeable effect on crypto currency then don't you think US is majorly in control on crypto. Although, I believe since we have exchanges in USD measures, it means a lot. Now is the time to observe the decentralized character of crypto. In that, with the present condition of the world cryptocurrency must stand

Sanugarid

full member

Activity: 1442

Merit: 153

★Bitvest.io★ Play Plinko or Invest!

Quote from: jackg on April 13, 2020, 11:39:45 AM

I think there are two mine ideologies with crypto:
1. It gets treated like cash
2. It gets treated like gold

Cash and Gold, never gets old. Most probably bitcoin is treated that way because it can be both, a currency and a store of value, maybe that is why crypto is in demand right now. I like seeing people having it as both it feels like we are getting much of what we wanted in the first place, we didn't even ask bitcoin to reach $20K right? Or did we?

Quote from: jackg on April 13, 2020, 11:39:45 AM

If it's treated like gold we'll probably see quite a fall when the recession hits
If it's treated like cash, cash is seen as a bit of a guarenteed investment so bitcoin will be in good steadings...

I think if people treat bitcoin more as a gold then probably there would be a higher price resistance because in times like this people are fearful and they are more likely to hoard it. Otherwise, if treated like cash (assume that we already have plenty of merchant accepting bitcoin) people holding bitcoin would not hesitate to spend it no matter what the price is.

jackg

copper member

Activity: 2856

Merit: 3071

https://bit.ly/387FXHi lightning theory

I think there are two mine ideologies with crypto:
1. It gets treated like cash
2. It gets treated like gold

If it's treated like gold we'll probably see quite a fall when the recession hits
If it's treated like cash, cash is seen as a bit of a guarenteed investment so bitcoin will be in good steadings...

jambulbebek873

newbie

Activity: 52

Merit: 0

Couple days ago, Bloomberg updated their prediction model that they created last year to determine the odds whether USA will plunge into recession within 12 months, and now the chance of a recession stands at 100%, confirming an end to the nation’s longest-running expansion. Since I'm pretty new in cryptocurrency, what's your opinion regarding this related to cryptocurrency, is there any historcial model than can be compared with this kind of events? Will this effect long-term future for Crypto in general?

model: https://www.bloomberg.com/graphics/us-economic-recession-tracker/

Topic: US potential Recession and its effect on Cryptocurrency - page 2. (Read 358 times)