How Will The Upcoming Recession Affect Bitcoin?

[alyssa85]

Recessions usually end up with fiat losing value and when fiat loses value then bitcoin gains value.

It depends on whether bitcoin is more attractive than gold. See the following article:

https://www.coindesk.com/gold-not-bitcoin-is-drawing-haven-demand-on-us-recession-fears

The threat of a recession has sent global equities lower. Notably, the Dow Jones Industrial Average plummeted more than 450 points in day two of a sell-off.

Meanwhile, gold has risen from $1,460 to $1,500 per ounce in the last 48 hours and is now looking to extend gains. The yellow metal, a classic safe haven asset, is clearly benefiting from the recession concerns and the resulting risk aversion.

Bitcoin, however, has been largely trapped in a $8,200–$8,500 range since Tuesday. In fact, the top cryptocurrency’s bounce from recent lows near $7,700 has run out of steam near the 200-day moving average (MA) resistance at $8,483 over the last 48 hours.

The lack of demand for bitcoin as a safe haven asset amid the economic worries appears to contradict the argument often put forward by many observers that the cryptocurrency is digital gold.

Now we can argue about the reasons why - but I would suggest that the debacle in December 2017 when people were waiting three weeks for their transactions to be confirmed, really dented bitcoin's attraction to investors.

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[abhiseshakana]

I think there's a difference in how Bitcoin will be affected with a recession now, and how it would be affected in say ten years' time, when I assume Bitcoin would be a part of everyday life.
Currently Bitcoin is still a risky asset with high volatility. I don't think people would see it as a safe haven against the turblunence of fiat - with the exception of really dramatic scenarios such as hyperinflation and currency collapse.

The future however I think is different. If we assume Bitcoin continues to develop, become more stable in price - or at least more resistant to abrupt changes, then there is every reason to see people in the future flocking to BTC as a more convenient version of gold.

The simple language is whether cryptocurrency is a necessity in a digital economy or is it just a choice. When someone assumes that cryptocurrency assets are not safe, it is actually not based on the problem of volatility alone but rather because beginners do not understand how cryptocurrency works. Beginners are desperate to invest in cryptocurrency but do not understand the product knowledge.

When talking about investment options during a recession, gold and silver are definitely the safest winners. The safest is not necessarily the most profitable. Going forward, Bitcoin will grow even more because in principle millennial generation always follows the trend. Now and in the era of digital financial technology, bitcoin will be an option as long as many people understand the internet, blockchain technology and the spread of internet connections evenly throughout the world.

The hope is that bitcoin will become a way of life, and to be a way of life must be easily accessible to everyone.

[Xxmodded]

Bitcoin have depend on how situation or regulation from some country, when many country have allowing bitcoin become legal bitcoin price higher, but when many economic community want to banned bitcoin make bad situation for bitcoin with lower price. Bitcoin be part with many company and allow for accepting bitcoin.

[pieppiep]

Recessions usually end up with fiat losing value and when fiat loses value then bitcoin gains value.

It depends on whether bitcoin is more attractive than gold.

The recession could indeed make fiat losing value. People will search the other way to save their money into another form, and many of them still believe in gold. I think it's only a few people who move their funds into bitcoin because I think most people will be afraid of the volatility in bitcoin. They choose gold because the up and down of the price is not significant depends on bitcoin price. And besides that, they are too busy to always check on the bitcoin price.

Gold now still be the number one of people's choices as the investment. But bitcoin could be another choice of people if they can see the other benefits of bitcoin in the long-term. But that will depend on how they look bitcoin as the investment because not all people can accept the volatility of bitcoin price. But as we know that technology becomes better nowadays, people will try to look at another investment and soon, they can moves their funds into bitcoin too.

[CryptoBry]

Recessions usually end up with fiat losing value and when fiat loses value then bitcoin gains value. Now, there is a chance people sell bitcoin to cover for expenses somewhere else but that doesn't mean it will certainly happen, even if some people sell their coins when fiat loses its value and bitcoin gains value there will be buyers as well who would like to take advantage of the situation.

They will want to get out of the fiat world and get into crypto world to make a profit, we have seen that happen time and time again in many countries so even if it happens on a larger country same thing may happen. It is not a guarantee which direction it will go but there is a big chance investors may want to go to gold/silver route as well as crypto which would make their prices go up.

Yes, during recession the one getting the hard hit is going to be the fiat money borne out of the traditional financial and economic system. In this way, Bitcoin is going to be highlighted as the best alternative to the usual money as it is deflationary and not inflationary. Remember that during recession, there is a possibility of inflation roaring its head especially if there is a problem of supplies of goods against the existing demand though the other thing can also occur. During chaotic situations, there will always be FOMOS and FUDS and I am sure that Bitcoin lovers would be using the opportunity to share positive things in favor of Bitcoin which people can easily pick up. Of course, the pervading doom and gloom sentiment will always be there and Bitcoin can also be affected with this. Now, we are talking here of many possible scenarios that can occur if ever a global recession can hit us but what can happen might be so different from the things we are thinking especially since Bitcoin has not yet been tested under the same economic malady. Let's see.

[desticy]

It is possible that during the next global recession, Bitcoin, for some time, will become a lifeboat for the capital of both ordinary and institutional investors.
In view of this, the prices for cryptocurrencies will have to grow significantly, at least at the beginning of the crisis.

But what will happen next is a big question. After all, the market is still volatile and speculative, which means that upon reaching certain highs capital outflow from bitcoin to fiat may occur, which may well cause a severe recession in the cryptocurrency market.

[huige007]

Bitcoin have depend on how situation or regulation from some country, when many country have allowing bitcoin become legal bitcoin price higher, but when many economic community want to banned bitcoin make bad situation for bitcoin with lower price. Bitcoin be part with many company and allow for accepting bitcoin.

This is a fact. Bitcoin has potential of changing financial condition of not only individuals but those of countries but for this, we bitcoiners shall spread awareness regarding this spectacular currency which has dual nature i.e. both currency and investment. If people realize its potential, only then companies etc would accept it.

[barabarian1]

in my opinion if there is an economic recession some people will choose to secure their assets. and one way to secure assets is to move their financial assets from high risk to low risk. usually people will choose gold. and bitcoin is a high-risk investment tool. so I think when there is a recession will not have an impact on bitcoin.

[SvonioneFromMangoCoinz]

It will greatly affect the crypto market. If you remember the fact that the US started to tax on China, the value of bitcoin would have dropped sharply in early 2019.
When the economy is in recession, cash flows into gold and safe assets and has a finite supply, it will not flow back to bitcoin. so I think bitcoin will continue to bleed when the recession comes. Sharks will sell bitcoin to buy gold.