If Recession Kicks In, How Will Bitcoin Perform?

[cabron]

If Recession Kicks In, How Will Bitcoin Perform?

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.

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.

[palle11]

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.

[Febo]

If Recession Kicks In, How Will Bitcoin Perform?

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.

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.

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.

[Sanugarid]

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.

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.

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.

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.

[batang_bitcoin]

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.

[arallmuus]

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.

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.

[exstasie]

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.

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

[Hydrogen]

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.

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

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.)

[shield132]

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.

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!

[mu_enrico]

Will Bitcoin go down with the global market?

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?

[exstasie]

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.

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.

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.

The united states by contrast still has a central bank with liquidity which could be utilized to successfully stimulate markets.

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.

[wozzek23]

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?

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.

[azmirihaque]

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.

[DoublerHunter]

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.

^ 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.

[target]

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.

^ 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.

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.

[cryptoboy007]

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?

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.

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?

[exstasie]

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.

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.

[CaVO32]

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.

^ 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.

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.

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.

[Jorge158]

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.

[mycryptocoin]

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.