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Author Topic: How would Bitcoin react to a global financial crisis?  (Read 349 times)
thecryptillian
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January 06, 2018, 11:40:41 PM
 #1

It has been 10 years since the 2008 financial crisis and there are a number of financial experts out there predicting doom and gloom to hit the financial world this year. To be fair, every new year brings new crazy predictions, so, although I am not reading too much into it, It did get me thinking - how would bitcoin hold up during a financial crisis.

We know gold is able to withstand a crisis, but with the price of gold very much being controlled nowadays, it might not be a good idea to use them as a comparison.

Interested to know peoples thoughts on the matter, what do you think would happen to bitcoin during a financial crisis?
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January 07, 2018, 12:21:38 AM
 #2

I am of the opinion that bitcoin's value in dollars will shoot up like crazy! Bitcoin is used by people (at least some of them!) as an investment and as a hedge against inflation. It is the new gold! So yeah, bitcoin will appreciate even further in value and more people will start to use it.


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January 07, 2018, 02:43:23 AM
 #3

I do think that during a financial crisis the value of bitcoins instead of rising will fall for sure , because it's not like gold , it's not fixed instead bitcoins lead to value when they finally gets investments coming their way and in that sense during a crisis there won't be much money to be invested , instead people will try to take money from wherever they can and thus I answered like this , it's really weird to think that it's value will rise that senario is kind of impossible , but it may if it dominates the cryptocurrency market.
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January 07, 2018, 02:56:00 AM
 #4

I am of the opinion that bitcoin's value in dollars will shoot up like crazy! Bitcoin is used by people (at least some of them!) as an investment and as a hedge against inflation. It is the new gold! So yeah, bitcoin will appreciate even further in value and more people will start to use it.

I don't think I can agree with this at all, you have to think that in its current state a ton of people in Bitcoin is being used by people as an investment with the money that they can afford to put into it. If the global economy and financial institutions were to have a crisis people would pull this money immediately, as they need it for their real lives.


People would pull out the price would crash and then most likely come back up, but who knows.
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January 07, 2018, 03:34:45 AM
 #5


I don't think I can agree with this at all, you have to think that in its current state a ton of people in Bitcoin is being used by people as an investment with the money that they can afford to put into it. If the global economy and financial institutions were to have a crisis people would pull this money immediately, as they need it for their real lives.


People would pull out the price would crash and then most likely come back up, but who knows.
Yes! Probably when there is financial crisis, people are withdrawing their any investment just to survive in the crisis and to live even there is economic problems.
We cannot rely 100% in bitcoin during crisis times. When all people pull out their investment. Bitcoin price will fall and that will be the cause of crisis.

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January 07, 2018, 04:18:35 AM
 #6


I don't think I can agree with this at all, you have to think that in its current state a ton of people in Bitcoin is being used by people as an investment with the money that they can afford to put into it. If the global economy and financial institutions were to have a crisis people would pull this money immediately, as they need it for their real lives.


People would pull out the price would crash and then most likely come back up, but who knows.
Yes! Probably when there is financial crisis, people are withdrawing their any investment just to survive in the crisis and to live even there is economic problems.
We cannot rely 100% in bitcoin during crisis times. When all people pull out their investment. Bitcoin price will fall and that will be the cause of crisis.

I'm not saying it's going to be the cause of the crisis, but I think that the mindset of a lot of people here is that the bitcoin price is countercyclical to the overall global economy -- though this couldn't be any farther than the truth. As Bitcoin has never experienced anything in relation to a global crisis, it only gained real popularity in 2011 (way after the 2008 banking crisis)

So Bitcoin will take a beating after a crisis, I know that much.
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January 07, 2018, 04:21:05 AM
 #7

Bitcoins would be the one safe Haven that no one can control or touch. Gold is usually where people run, but if you aren't physically holding it you don't really own it, you just own an IOU of gold, which honestly is exactly what's wrong with fiat. No one needs to owe anyone anything. Debt is completely made up by governments and banks and is just not a need. It's hard to think that way but it's the truth.
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January 07, 2018, 05:00:48 AM
 #8

I guess it would depend on the nature of the crisis and people's behavior during the crisis. I'm not sure if many would run to an intangible asset once a crisis occurs. If people choose to panic sell and dump all their coins, then the value would drop or possibly crash. Gold may have been able to withstand a crisis however bitcoin may not be that resilient despite that its decentralized. Unlike with fiat, it does not have the same kind of use for people yet so it's hard to tell how it will fair in a crisis. The thing is, it's going to be affected for sure in any part of the world that it is in.
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January 07, 2018, 05:45:48 AM
 #9

I am of the opinion that bitcoin's value in dollars will shoot up like crazy! Bitcoin is used by people (at least some of them!) as an investment and as a hedge against inflation. It is the new gold! So yeah, bitcoin will appreciate even further in value and more people will start to use it.

I don't think I can agree with this at all, you have to think that in its current state a ton of people in Bitcoin is being used by people as an investment with the money that they can afford to put into it. If the global economy and financial institutions were to have a crisis people would pull this money immediately, as they need it for their real lives.


People would pull out the price would crash and then most likely come back up, but who knows.

Some very interesting points here. I would have to agree that it would crash BUT it might just depend on two important factors, 1- how mainstream bitcoin has become. So if there is some serious real-world use there, then people might turn to bitcoin during the crisis. #2 - The cause of the crisis. If it's got anything to do with the banks for example, the world might finally come to its senses and turn to a decentralised economy. But who knows.
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January 07, 2018, 03:26:01 PM
 #10

It's really hard to say. On one hand, since Bitcoin isn't really tied to any economy, it's more likely to retain its value than fiat. On the other, I would think that people would want their assets to be liquid in times of crisis, and Bitcoin is anything but at the moment.

What we know for sure is that it can actually thrive in local economic crises, as evidenced by countries like Venezuela. The global stage is completely different though, and my personal opinion is that it's going to go down like everything else, but is likely to fare better than traditional currencies.

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January 07, 2018, 03:36:33 PM
 #11

It would become the value to store all your money so it would explode as everyone would feel safer in bitcoins than in banks

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January 07, 2018, 03:39:38 PM
 #12

Other experts say that last year's rise in the price of Bitcoin was not caused by investors interest, but by the drop in the price of the dollar. If the economic crisis in 2018 will be even bigger, it means that the price of Bitcoin this year will increase even more than in the last year.
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January 07, 2018, 03:40:07 PM
 #13

if it was a year+ ago i would have said not much effect apart from a little rise because of it.
but we are talking about 2018 a year after a lot of adoption mainstream and otherwise has actually happened. we now have NASDAQ talking about adding bitcoin market!

people are considering bitcoin as an investment option and it is a lot more convenient than things like gold. you hold bitcoin yourself without anyone even knowing. it  doesn't need storage "space" like gold and a lot of more benefits. if a global financial crisis happens, bitcoin will shoot up to the moon in a very short time. i believe $1 million is even possible.

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January 07, 2018, 03:41:34 PM
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If there will be even a small crisis in financial sector, we will see a very big growth IMO because investors will move their money to crypto. It's perfect tool for them!

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January 07, 2018, 04:06:14 PM
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It has been 10 years since the 2008 financial crisis and there are a number of financial experts out there predicting doom and gloom to hit the financial world this year. To be fair, every new year brings new crazy predictions, so, although I am not reading too much into it, It did get me thinking - how would bitcoin hold up during a financial crisis.

We know gold is able to withstand a crisis, but with the price of gold very much being controlled nowadays, it might not be a good idea to use them as a comparison.

Interested to know peoples thoughts on the matter, what do you think would happen to bitcoin during a financial crisis?


First, those prognosticators making those statements do so every year, and the more outlandish the claim of catastrophe, the more eyeballs and clicks they get because fear sells attention, and attention generates revenue. So doom and gloom should be taken with a grain of salt. It's much more noteworthy when economists issue warnings because it's supported by research and not designed to sell attention or generate revenue, but to inspire policy.

Second, Bitcoin has very little utility, so it's value comes from speculation, or the mass perception that someone in the future will value the coins more than you did when you purchased them and you will therefore be able to sell them at a profit. Because the value is made up primarily of speculators, the wealth poured into sustaining the price comes from people who feel financially secure and able to risk losing the investment. Essentially, the confidence created by the current robust economy creates the confidence for people to speculate. In an economic downturn, confidence will disappear and people will not tolerate such risky asset holdings any longer, so all assets supported by speculators and risk-takers will suffer greatly. The riskier the asset, the more it will decline in price. As the king of speculative assets, I expect in an economic downturn that crypto will suffer outsized losses to things with inherent value, like stock equities and assets that generate income like real estate or REITs.

In short, everything will go down in value, but crypto will fall harder.

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January 07, 2018, 04:59:08 PM
 #16

I am not really sure but I think may be global financial crisis will give affect to bitcoin, but I do not know how big the impact.. in that condition people will be very careful when choosing an investment and some people will sell their asset, one of them is sell their bitcoin to solved their financial problem.

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January 07, 2018, 05:48:57 PM
 #17

It has been 10 years since the 2008 financial crisis and there are a number of financial experts out there predicting doom and gloom to hit the financial world this year. To be fair, every new year brings new crazy predictions, so, although I am not reading too much into it, It did get me thinking - how would bitcoin hold up during a financial crisis.

We know gold is able to withstand a crisis, but with the price of gold very much being controlled nowadays, it might not be a good idea to use them as a comparison.

Interested to know peoples thoughts on the matter, what do you think would happen to bitcoin during a financial crisis?

As you said bitcoin bring new surprises with every year so we can expect this to happen in this year too.Yes the if there is a financial crisis it will affect the bitcoin price too because people will sell their bitcoins to make money so the supply will increase and demand will decreased.But gold is different from cryotocurrency so gold can withstand even there is financial crisis but bitcoin maybe not able to withstand the price will fall.

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January 07, 2018, 07:22:52 PM
 #18

Prices are currently stable now and I believe it'll get higher again but I wouldn't bet all on bitcoins. Only reason I keep some is because I found it more affordable and easy to acquire but given the chance I would invest in metals as well. Gold and silver as investments has been around for a long time and though they may be highly regulated and not grow as much, I still think they are much safer stores of value.
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January 07, 2018, 07:27:23 PM
 #19

Bitcoin first came into existence when there was a global crises during 2008 and that is when the first white paper came out regarding a decentralized currency without any manipulation and since it was a revolutionary new system more people started getting interested in it and now since it is a main stream currency and almost everyone who follows the news have heard about bitcoin ,a financial crises will attract new investors and sure the price will rise.














 

 

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January 07, 2018, 07:42:54 PM
 #20

It's really hard to say. On one hand, since Bitcoin isn't really tied to any economy, it's more likely to retain its value than fiat. On the other, I would think that people would want their assets to be liquid in times of crisis, and Bitcoin is anything but at the moment.

What we know for sure is that it can actually thrive in local economic crises, as evidenced by countries like Venezuela. The global stage is completely different though, and my personal opinion is that it's going to go down like everything else, but is likely to fare better than traditional currencies.

i agree, bitcoin would go down in value with a global crisis/crash.
In my own cash hypotically speaking i would have to liquidate my crypto if things got really bad financially.
I would class myself as a below average earner so i assume others like me would have to do the same.

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