Topic: Will the next economic crisis in the world instead cause financial inflows into - page 3. (Read 512 times)

I think the covid19-caused economic decline can already qualify for an economic crisis in Bitcoin lifetime, so it's better to say that Bitcoin has never seen a major global economic crisis. We saw Bitcoin taking a heavy hit from the initial shock, meaning it's currently not a true safe haven asset. But then came a quick recovery, and for some time Bitcoin seemed to not be correlated with other markets. Then the bull run sparked from institutional fear of US dollar inflation, and now that this fear has been reduced Bitcoin is on decline, though in larger picture it has gained a lot. But there is no rule that says that Bitcoin must behave like that during the next crisis.

the last economic crisis was the housing market
the next economic crisis is obviously the pensions

so knowing pension funds CANNOT just hoard bitcoin
(higher standard of investment regulation: insurance: audit: checks)

so what they will do is people will lose interest in the fiat portfolio pensions. (fiat pension crisis)
and instead use bitcoin ETF portfolio as their value store/peg of pension funds

its why so many companies are spending billions trying to get first acceptance of ETF rather then just hoarding coin for coin trades

once one ETF is accepted and regulated. the others will take that application template to get their own ETF set-up
and then they need to buy bundles of bitcoin to be their bitcoin ETF collateral to then offer their ETF shares to investment companies that only trade with other regulated companies

If it really is a global crash then similar to the start of Covid, all the money is going to flow out as people get scared and run for the hills. While Bitcoin did bounce back this time so did stocks. However I am not sure that Bitcoin would do as well in an economic crisis situation that is more prolonged (like the subprime mortgage crisis where huge amounts of jobs were lost and it created a vicious feedback loop). Everything dropped very rapidly at the start of Covid but almost everything bounced back within a few weeks - barring a few of the worst affected industries like hospitality. While Bitcoin has attracted a lot of money and is on its way to becoming a "safe haven", it simply does not have the decades of historical precedence things like Gold can offer.

Very much possible! During the last prominent economic crisis,  we didn't have the option to move to crypto. So most people had moved to so called safe heaven like Gold or other precious metals. Historically, gold has been used as a safe heaven during any financial crisis. I don't think this trust on gold will not end anytime soon and will continue even during the next financial crisis.

But this time, we have cryptos! So its no wonder that a lot of people will flock into crypto market during uncertain times. However, such incident will definitely increase its adoption as well as the price. But considering the price of bitcoin is so volatile, it may scare some people out of the market. Because a safe heaven usually stays stable uring bad times. Bitcoin has not yet shown such resilience and maturity. So a major impact may not happen!

so if that happens only gold will save finances when the global crisis hits all corners of the economic sector.
but so far, after a fruitless trade war dispute, some possibilities are very unlikely. facing a global crisis is a terrible thing including for Bitcoin. because who will calmly hold it during a global crisis other than the resilience of values ​​that can really fend off inflation.
the dollar was definitely ruined, and all the paper money was useless.

I agree, BTC going into an economic frenzy is something that hasn't happened before and it is only a matter of guessing what it may look like.

Initially, the price drop might lead to many people liquidating their positions, BTC will then reach a price where only a small minority will buy in (similar to how it was in 2009/10). Though whether this is something that can happen it's all dependent on market sentiment and how people view the space. As we see it today, with many more investors thinking of BTC as a gold-standard the above scenario might not play out as dull as described.

People probably won't care about currencies once a economic collapse happens and by that I mean a complete economic collapse. Bitcoin, fiat and other cryptocurrencies will be treated the same. All faith will be lost in money for a while and there will probably be attempts made especially by cryptocurrencies to become the new mainstream currency used after the event but it would be more probable that people revert to trading things rather than using any money type system.

The ones flocking now will be in a better position, when/if such a crisis hits, its already too late.

Transitioning from the debt based economy to the savings based economy won't be overnight, and many things will change. No, you don't get in debt in invest fast and earn fast, you save first, then use those savings to invest. Slower, but safer. Read the Austrian school of economy to get an idea on how this works.

In addition, money that does not lose value overtime, doesn't need to go into banks, that becomes optional. So instead of being desperate to invest in whatever (which might fail) you will simply save it for when its really needed. You can kinda experiment this in some online/solo games where their fake money keeps the same purchasing power overtime (many MMOs actually have inflation so this doesn't apply to all).

The mindset of some people will have to change, at least in the countries that heavily promote getting in debt for things. Some cultures actually already practice saving before buy. So spend 20 years to buy your house, instead of getting in debt now and keep paying it for 40 years, that kind of thing.

Yes you can still do that, but its optional. Lending or getting in debt, but at least it cannot be done with fake money anymore as its done today with fiat, the so called credit expansion using money that does not exist anywhere. Especially when they give you the right to take out your money at anytime in spite of being lent to someone else; because fractional reserve is magic (legal ponzi scheme done by modern banks).

There's already one brewing (or happening already for some countries), I still think pandemic-induced contraction will only be felt in the coming years. The last big one a decade ago got band-aided by debt relief and more money printing, which is really the same tactics used by central banks now. It'll still be a while before the banking system collapses but it won't be until China really flexes its muscles that we'll see real moves taking place.

IF the US dollar is to be thwarted, it needs to be replaced with something. Yuan is the likelier displacer, though, not Bitcoin.

Bitcoin's condition is very bad due to economic accidents so we have to work patiently. Many people sell bitcoins at a low price due to accidents. I can say that those who do not need more money would be better if they do not sell bitcoin at a lower price because if the situation in the future economy is good then bitcoin price will increase then if you sell it then good profit will be available.

We can only assume what will happen with Bitcoin in case of major economic crash, but it will most likely follow other assets and price will crash in beginning.
As long as people are running nodes and miners are working, everything will be fine in long run but be ready for some turbulent times ahead.
Real chaos may happen in case we don't have electricity for few months but this will not only affect Bitcoin but all financial sector, so useful items like axes and tools may be very valuable.

Look at Cyprus in 2013, exchange controls etc. Look at the totalitarian takeover of Hong Kong, and Venezuela, if bitcoin had been around.  Smart people will have some of their assets in a portable, non-censorable asset like bitcoin to protect themselves and provide an escape hatch. The people of Taiwan should have some now after they have seen the destruction of liberty in Hong Kong.

Bitcoin will do just fine and survive.  Who knows about the fiat price, of course, but bitcoin itself will be fine.

Your guess is just as good as ours. Bitcoin has never been through an actual economic crisis in the past so all we can really do right now is speculate.

There are only 2 scenarios that could happen in the top of my head:

1. People flock to so-called "safe haven" assets such as gold and bitcoin.
2. Bitcoin holders sell their bitcoin just so they have enough funds to survive.

Make your pick.

What is likley to happen to BTC in the imidiate aftermath of a global economic crash, and what will a recovery look like in comparison to the economy?