If Recession Kicks In, How Will Bitcoin Perform?

[PavelMed]

It will be difficult for all of us to guess how Bitcoin and other cryptocurrencies will behave. Whether they will pay attention to cryptocurrency or investors will not pay attention. Do they want to develop this topic in general, but I don’t think that everyone will forget about Bitcoin, it would be stupid.

[fiulpro]

Contrary to what news and media is saying I do think recession is already here.

It's here for the people who have lost their jobs , it's here for the people who are eating only one meal a day and it is here for one's who cannot afford their next meal .

I do not agree with the definition on Google * a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.*
I do know that recession is something that affects everyone individually.

_________________________________________________________

Back to your question.

I do think Bitcoins is doing amazing when it comes to people and the jobs it's offering them .

It definitely have earned respect on various levels , well at least for me. It's enabling people to trade , to send money with the safety of their homes , the Campaigns are providing job opportunities for a lot of people, the bounty Campaigns are actually replacing full time jobs for some.

For students like me , it's a blessing, with not much time to invest in part time jobs , Bitcoins have greatly helped in earning a little extra.

I have seen managers going around and helping people. People making donations, people doing a lot of good in the community.

I do think it's already preforming better than any Currency I know of.

Let us hope it grows in the upcoming years more and more.

_________________________________________________________

[Mauser]

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 crisis 2008 was a financial crisis, spreading around the world through the banking sector. Triggering a flight to safety with investors selling risky assets across board for government backed assets.

The crisis we are facing at the moment is affecting the hole world but directly hitting different sectors than the 2008 crisis. Commerce and Tourism took immediate hits with the lock down. Which is spreading through the economy much faster than in the previous crisis.

People lost their jobs within weeks of the lock down resulting in an overall drop in demand. And since the governments are in printing so much money now to desperately saving big companies.

I don't think investor will sell off their risky assets.  We will see people not investing in risky asset for a while, which means also no big rise in bitcoins. But I also think that people will not sell their BTC holdings.

For this year I believe the BTC price will just stay on a similar level as in the last weeks.

[ser7878]

It will be difficult for all of us to guess how Bitcoin and other cryptocurrencies will behave. Whether they will pay attention to cryptocurrency or investors will not pay attention. Do they want to develop this topic in general, but I don’t think that everyone will forget about Bitcoin, it would be stupid.

this one is quite close to my opinion
I would add one thing - after 2008 recession bitcoin was innovative and came from unexplored internet.
Now we do live online and most of people are quite comfortable to hear such words as blockchain, mining, crypto, bitcoin and etc.
so It won't be as bullish as was before, but I won't believe it will fall because of current recession
time shows one pattern - people will to save their funds so they buy crypto instead of fiat

[BlocResearch]

It is going to be bullish of Bitcoin because the financial world is going to tremble and it is going to change after the coronavirus crisis is over, there were already various gaps in the industry. This has only worsened it more.


This is a shame, what is happening but then we need to understand that everything happens in the world for a reason. Bitcoin goes down for a reason, that is market sentiment and market behavior because, in the end, Bitcoin is also like a living person. It is here because we want it to be here as a beacon of hope against the banks and the corrupt but it is all complex world of life that we live in.

[tbterryboy]

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?

From the experience what I have learned from the 2008 recession, I guess bitcoin will become more attractive like gold if there is a recession kicks in. Before analyzing about how bitcoin will perform, it would be much better to understand what is the recession and what are its consequence on our day-to-day life. Recession is nothing but economic slowdown which means corporate will not get enough orders and they will go for layoff which will end up in more unemployment. When people are jobless, their buying capacity will be low which will again induce more economic slowdown.

So, stock market may not perform well which will enforce investors to go for other opportunities which means they may look for bitcoin and gold. It means money in-flow will switch over from stocks and government bonds to alternate investments like bitcoins. So, bitcoin may have big value but we may need to pay higher rates for our daily needs. Because usually recession will end up in costlier food and services.

[Vishnu.Reang]

Here is my take on this - In case a recession occurs, we can expect Bitcoin exchange rates to plummet. It may go below $3,000 per coin (the lowest levels we had during the last 3 years). Because when the economy collapses, people are likely to go for stable assets such as gold and silver, which can also act as a store of value. High risk assets such as cryptocurrency will have few backers then.

[Barnabe]

Here is my take on this - In case a recession occurs, we can expect Bitcoin exchange rates to plummet. It may go below $3,000 per coin (the lowest levels we had during the last 3 years). Because when the economy collapses, people are likely to go for stable assets such as gold and silver, which can also act as a store of value. High risk assets such as cryptocurrency will have few backers then.

I don't think this is entirely true. Some people will certainly sell bitcoin because they won't have income due to the possible recession, but I don't think they will buy gold or silver. People will probably sell BTC to pay the bills. But I also think that cryptocurrency prices will drop if a recession happens.

[bitgolden]

I am hoping for bitcoin going up, whatever happens. Like recession kicking in, recession not kicking in, money being more valuable, money being less valuable, goods not being available, or extra manufacturing when this ends. I do not really care about anything but just bitcoin going up. I just hope whatever that will help bitcoin going up, end up happening, I don't care what it is in the end because I am heavily invested in bitcoin and if worlds going to burn when bitcoin goes up, let it burn.

I am sick and tired of trying to do the right thing and trying to think the right way, I have done that all my life and somehow people who are wrong about the economy, who are corrupted, who are bribed all got away with their way, its my time and I want my share of the pie now.

[cryptoboy007]

Here is my take on this - In case a recession occurs, we can expect Bitcoin exchange rates to plummet. It may go below $3,000 per coin (the lowest levels we had during the last 3 years). Because when the economy collapses, people are likely to go for stable assets such as gold and silver, which can also act as a store of value. High risk assets such as cryptocurrency will have few backers then.

Don't you think the safe-haven narrative of Gold is beginning to rub off on Bitcoin? People are beginning to perceive Bitcoin as a good hedge against currency devaluation.

[Hydrogen]

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.

The best method of economic recovery AFAIK is empowering small businesses. Start ups and small businesses account for 50%+ of new job creation and is the logical market to tap. The main requisite required is liquidity. If the government truly wants the economy to recover they'll mandate loans with excellent terms for small businesses, coupled with tax cuts/incentives to boost economic growth. This will delegate the problem of economic stimulation and job creation to a high number of intelligent, resourceful and innovative individuals.

The united states is definitely far better positioned than china to architect a successful recovery. The only question is whether they'll implement the "common sense" policies they claim to support and habitually do the complete opposite of.

[exstasie]

The best method of economic recovery AFAIK is empowering small businesses. Start ups and small businesses account for 50%+ of new job creation and is the logical market to tap. The main requisite required is liquidity. If the government truly wants the economy to recover they'll mandate loans with excellent terms for small businesses, coupled with tax cuts/incentives to boost economic growth. This will delegate the problem of economic stimulation and job creation to a high number of intelligent, resourceful and innovative individuals.

There has been something like $700 billion made in small business loans via the stimulus bills, and likely more to come in the next round. I'm worried about the amount of debt being taken on in the case that business owners can't meet the terms for forgiveness.

May unemployment data gets published this Friday. Goldman Sachs' latest estimate for May is 21.5% and while that number could be falling as states reopen, I wonder if it will fall far enough and fast enough to prevent this sort of cycle:

The united states is definitely far better positioned than china to architect a successful recovery. The only question is whether they'll implement the "common sense" policies they claim to support and habitually do the complete opposite of.

China is doubly screwed because slow recoveries in the West means weak demand for Chinese exports. In the end, both countries are completely dependent on a strong consumer recovery.

I'm eager to see incoming retail sales data. These nationwide protests and riots can't be helping. They are keeping businesses closed, not to mention curfews being implemented all over the place.

[bearexin]

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?

In a typical recession the price of Bitcoin is going to fall because people will sell their coins at such times. Just like someone said, Bitcoin thrives during crisis but you have to beware of recession. Bitcoin is a volatile asset and I don't think people will be buying something that goes up and in the next minute it's crashing.

Investments wouldn't be a thing for most people, they will be selling to fiat so they can be able to deal with some challenges that comes at the time. But a recession won't cause an end to Bitcoin, in fact such a time would be the best time to start Bitcoin after the price has dropped to a very low, because after everything it will still go back up.

[cryptoboy007]

I am hoping for bitcoin going up, whatever happens. Like recession kicking in, recession not kicking in, money being more valuable, money being less valuable, goods not being available, or extra manufacturing when this ends. I do not really care about anything but just bitcoin going up. I just hope whatever that will help bitcoin going up, end up happening, I don't care what it is in the end because I am heavily invested in bitcoin and if worlds going to burn when bitcoin goes up, let it burn.

I am sick and tired of trying to do the right thing and trying to think the right way, I have done that all my life and somehow people who are wrong about the economy, who are corrupted, who are bribed all got away with their way, its my time and I want my share of the pie now.

LOL... It sounds like a poem to me. Well, I am optimistic as you mate

[7788bitcoin]

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.

There is no asset in the world that is safe if you are dumb enough to invest at its peak and that is the case you are talking about, if anyone invested in bitcoin when the price rallied and reached its peak, who is to be blamed. Is there any asset in the world that is safe from that ? .

In the case of bitcoin everyone had the opportunity to invest in it when the market when down and if you were not smart enough to invest at that time then there is no point in complaining about it.

If there is a recession then no asset is same from that situation and that includes bitcoin.

[Yatsan]

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.

There is no asset in the world that is safe if you are dumb enough to invest at its peak and that is the case you are talking about, if anyone invested in bitcoin when the price rallied and reached its peak, who is to be blamed. Is there any asset in the world that is safe from that ? .

The word safe in terms of asset is not as assured as we use them, that only means that if we are talking about assets some of them are considered safe as the word itself means "low risk". So the question, is there a safe asset? YES there is. However on the case with bitcoin, it is not safe at all coz in bitcoin what you need to invest first is the trust of yours, before the money as you have said there are people who are dumb investing when the price is already at the peak. Just imagine a scenario where a friend of yours climb on a mountain then they invited you to join but you refused, the next day you'll see their picture posted on the internet, you see their lovely faces with joy at the peak then you decided to go alone, you bumped to your friends while they are going down, then it rains. Regretting isn't it?

In the case of bitcoin everyone had the opportunity to invest in it when the market when down and if you were not smart enough to invest at that time then there is no point in complaining about it.

I must say other than patience, one vital key is the trust. It's better to try than to feel sorry.

If there is a recession then no asset is same from that situation and that includes bitcoin.

A recession is a collapse, no asset can get away with it even bitcoin, wait who knows what will happen with bitcoin? no one does.

[Stedsm]

@OP,
I seen reason for Bitcoin not to outperform every single asset out there and while you're asking how it'll perform in the future, just see its latest formation and you'll understand. The Corona pandemic broke down BTC to a new fresh low this year at around $3700 but it rebounded so hard and the % of that rebound is, by any means, extremely higher than any sticks available in any sort of markets. I believe that BTC may see a correction, a steep correction before getting higher once again (I mean BTC is yet to get down more) but it'll definitely survive the upcoming recession (if it ever takes place) due to the fact that BTC has least market capitalization compared to big players as of now, and it won't be getting vanished out of the markets anywhere.

[STT]

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.

Gold didnt crash in 2008, its unlikely either asset pulls back in a serious way as even in recession there is a loose monetary policy that is hard to reverse right now even if recession occurs in business growth.    A proper contraction in the economy is usually associated with a hard money scenario as monetary velocity reduces.   If bonds fail to pay off and default that would lead to contraction in money supply, I doubt this would occur on average right now as so much debt is contained in government bonds which are not likely to default.   Japan is a good example for all of this as they have been running QE since 1990's and has yet to repay the bonds or allow any contraction in monetary base.
  I dont see BTC pulling back over a very long term view so long as the easy money policy continues.

[Janation]

Here is my take on this - In case a recession occurs, we can expect Bitcoin exchange rates to plummet. It may go below $3,000 per coin (the lowest levels we had during the last 3 years). Because when the economy collapses, people are likely to go for stable assets such as gold and silver, which can also act as a store of value. High risk assets such as cryptocurrency will have few backers then.

I don't think this is entirely true. Some people will certainly sell bitcoin because they won't have income due to the possible recession, but I don't think they will buy gold or silver. People will probably sell BTC to pay the bills. But I also think that cryptocurrency prices will drop if a recession happens.

Cryptocurrencies' price will obviously fall.

We don't know how low and that also includes Bitcoin since we are talking about recession. This pandemic is really hard and a lot of other things can also affect the price and not just the recession. 2020 is just a disaster for all of us, a lot of things are happening and it might continue to surprise us this in the coming months and I think the price of Bitcoin will be affected. But we don't need to worry since there will be a lot of people that would be taking advantage of that fall, it will quickly go back.

[Saisher]

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?

I don't think it's going to happen, if Bitcoin was made to cushion recession then there is no recession strong enough to defeat Bitcoin, in fact right now we are now in the brink of recession, but so far market is performing better, better than what we expected because Bitcoin was going down before the start of this Pandemic, so far it's as strong as ever, thanks to the strong support of the community.