Big test for Bitcoin during the next Economic Collapse.

[Wind_FURY]

I am starting to believe that Satoshi created Bitcoin for what’s coming next, or might come next.

See, I've always thought Satoshi (whoever that entity is) created bitcoin because of the banking crisis of 2008/09.  For a time back then there was a fear that huge banks would fail and ATMs would stop spitting out cash.  Satoshi might have been thinking about rampant money printing, but who knows?  

I still don't see bitcoin as a safe-haven, go-to asset in times of trouble type of investment, and the only reason I say that is because of how volatile it is.  When I think of safe-haven assets, I think of gold and silver which tend to hold their value and even increase when shit hits the fan on Wall Street.  But bitcoin?  It's just over 10 years old and doesn't have a track record (yet) of providing a safety net for investors when they want to get out of stocks and/or cash.  Sure, everything is looking very rosy at the moment but we all know bitcoin could plummet in the blink of an eye.  It's happened many times before and I've no doubt it'll happen again.

That’s why I believe Bitcoin’s biggest test is during the next Economic Crisis, which would also be during a period with M2 Money Stock at the highest.

https://fred.stlouisfed.org/series/M2

If Bitcoin fails to hold, or increase its value DURING HYPERINFLATION, and crashes together with the global economy, then we might see it fail the test. BUT, I also believe it wouldn’t be its only test. It will be its biggest test, but it’s just the first test.

[Obito]

They will blame Covid-19 but the system was allready broken long before that.

They will blame it because it exposed the broken system and they know that the broken system will not be for the long term and they have back up plans at the bay to curtail their own losses when this collapse happens. If an economic collapse were to happen, I think that bitcoin will not be the only one that can help us in that collapse because there is still gold and silver to help with that, remember that you can choose what you can hedge against the collapse but I advice that you should diversify.

[Heisenberg_Hunter]

We all know 99% of the people who are investing in bitcoin or any cryptocurrency is looking for a mere cashout when they make 2x or 3x but some good old guys and the rest of the 1% know that Bitcoin was created to be a digital and decentralized version of our currency. In an open market where anyone can come in, some billionaires like Elon or the old timers are playing the speculative game to pump and dump the market to cash out the profits.

Many of us know that the whole world is printing more money to stabilize the losses we have faced during 2020 COVID period and people knowing this and getting into bitcoin ain't the reason. For instance, if we take the motto behind a random stranger who is in a shitty Binance Telegram group or some random newcomer in Bitcoin Twitter all they say is that they came to the crypto market to get rich and only a mere 1% came for the revolution and to stay like us.

The reason for satoshi inventing bitcoin and developers working on it, is always different while comparing them to a normal person who is here for profits. In the case of 1923 hyperinflation in Germany, the government printed too much trillions which made the people to carry cash in carts to buy one loaf of bread but currently the exposure and the government ideology has changed over the years and in my point of view a hyperinflation would likely occur.

Is it just merely “for speculation”, or an actual “safe haven”?

As I already said, when these alts and others shits like DeFi came in due to the open source movement we have moved into a speculation game rather than a revolutionary game. 99% ain't investing in bitcoin just because they know government is printing trillions but the reason is they want to get rich in this speculation game. In this post I predicted if we are in a dystopian era when bitcoin replaces Fiat currency we might be touching $500k but pumping to $50k when not really much has happened is only because people are getting in without knowing what bitcoin is!

Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

Neutral on this because if we don't have a way to make surplus money (jobs or business), we won't be able to invest anything since the money we earn and the money we spend neutralizes which is the current scenario in third world countries.

[Wind_FURY]

Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

Neutral on this because if we don't have a way to make surplus money (jobs or business), we won't be able to invest anything since the money we earn and the money we spend neutralizes which is the current scenario in third world countries.

Bitcoin’s biggest test during inflation won’t be, if there’s a surplus of fiat to invest in Bitcoin, because who wants fiat during a time like that?



The real test would be, will everyone actually start to accept Bitcoin for actual goods, and services. Would it be in demand as real MONEY, not as an “asset for speculating”.

[jostorres]

See, I've always thought Satoshi (whoever that entity is) created bitcoin because of the banking crisis of 2008/09.  For a time back then there was a fear that huge banks would fail and ATMs would stop spitting out cash.  Satoshi might have been thinking about rampant money printing, but who knows?  

I still don't see bitcoin as a safe-haven, go-to asset in times of trouble type of investment, and the only reason I say that is because of how volatile it is.  When I think of safe-haven assets, I think of gold and silver which tend to hold their value and even increase when shit hits the fan on Wall Street.  But bitcoin?  It's just over 10 years old and doesn't have a track record (yet) of providing a safety net for investors when they want to get out of stocks and/or cash.  Sure, everything is looking very rosy at the moment but we all know bitcoin could plummet in the blink of an eye.  It's happened many times before and I've no doubt it'll happen again.

That’s why I believe Bitcoin’s biggest test is during the next Economic Crisis, which would also be during a period with M2 Money Stock at the highest.

https://fred.stlouisfed.org/series/M2

If Bitcoin fails to hold, or increase its value DURING HYPERINFLATION, and crashes together with the global economy, then we might see it fail the test. BUT, I also believe it wouldn’t be its only test. It will be its biggest test, but it’s just the first test.

That will change as well, all those people who do not see bitcoin as a safe haven right now, will be seeing it in the next 10 years whenever there is an economical crisis. Price of bitcoin dropped a whole lot right now right? Well in the past 1 year we have moved from 5k price to ~60k price no matter how much it falls, in fact if it reaches to 20k price today, that would still be 4x return in a year as well, who can make a profit like that anywhere else? I didn't see any other stock that made this type of return.

Long story short it is obvious that people do not put money into things they are not certain about and I do not see anyone doubting bitcoin in the future, they are doubting it right now and that is why they do not put their money in but they will not be doubting it in the future. This is why I believe it is going to be awesome in the future.

[jrrsparkles]

I am starting to believe that Satoshi created Bitcoin for what’s coming next, or might come next. Because of the COVID-19 pandemic, I’m not sure about the rest of the countries, but the United Stated Federal Reserve prrrrinted inordinate amounts of U.S. Dollars to stimulate the economy, with plans to print trillions more under President Biden. All the prrrrinting and a falling GDP MIGHT be the seeds for the worst situation of an Economic Crisis. HYPERINFLATION.

Bitcoin has been criticized as a medium “for speculation”. Big test. Is it just merely “for speculation”, or an actual “safe haven”? Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

If fiat money is going to face serious economic crisis then the price of bitcoin will actually increase not only due to the fall of purchasing power of fiat but also people will start moving their fiat money to anything which is considered as Store of value and for sure more people will consider bitcoin as store of value than in past because they understand what is Bitcoin from covid 19 crisis and 2020 bull run.

[AndySt]

If fiat money is going to face serious economic crisis then the price of bitcoin will actually increase not only due to the fall of purchasing power of fiat but also people will start moving their fiat money to anything which is considered as Store of value and for sure more people will consider bitcoin as store of value than in past because they understand what is Bitcoin from covid 19 crisis and 2020 bull run.

I really want to believe this, because if people lose faith in their governments and in their economy, then the only hope remains for assets that are supposedly not subject to depreciation. Another question is that this is all based on the belief of people buying up the asset and this belief may not coincide with the asset itself. Let's not forget what the American government did during the Great Depression with the gold reserves of the citizens.

[Heisenberg_Hunter]

Bitcoin’s biggest test during inflation won’t be, if there’s a surplus of fiat to invest in Bitcoin, because who wants fiat during a time like that?

Probably.

The real test would be, will everyone actually start to accept Bitcoin for actual goods, and services. Would it be in demand as real MONEY, not as an “asset for speculating”.

Since we are still in the initial stages of the development (i.e 10 years), this isn't possible now as majority of the crypto market is geared towards making speculative profits rather than the real use cases. Almost 95% of the people who are involved in crypto are thinking bitcoin is only meant to be traded in exchanges and not to be used as a currency and changing these speculative mindset lies in the hands of true bitcoiners.

We are the ones who need to educate as many people as possible to accept bitcoin as a currency in return for doing work rather than making speculative bets on bitcoin. Even after speaking about bitcoin both technically and economically with people known to me for hours since 2017, the common people are still considering open source softwares like Linux and Bitcoin inferior to Windows and Fiat currencies.  Unless and until common people don't come out of the matrix world they live in (considering fiat as better currencies) they are doomed.

[amishmanish]

I think the fears of hyperinflation in the US are overblown. Hyperinflation is generally the result of printing a lot of money and that money being unable to find a market. Right now, the money being spent by the Feds is just going to major American corporations and investment institutions. I think it will leave American companies with a lot of spare cash-flow to invest in new markets and expand.

This is basically a roundabout method to counter the world trade balance. If you see the way international trade has shaped over the past few years, American manufacturing and infrastructure companies have essentially been ignored by Americans as well as the rest of the world. Most major technological infrastructure is being built by Chinese companies. In almost all of them, the Chinese government provides state backing. To the outsider, they are just companies participating in international bids.

These things have much greater geo-strategic implications than Bitcoin right now. When you really look at the scale of things, Bitcoin marketcap or Bitcoin transaction volume is a drop in the ocean. Frankly speaking, Bitcoiners and crypto should stick to making the technology better (For example, LN, streaming payments, DAOs). All of this discussion about the American Dollar collapsing and Bitcoin becoming Store of Value is pretty much hubris.

[Febo]

I am starting to believe that Satoshi created Bitcoin for what’s coming next, or might come next. Because of the COVID-19 pandemic, I’m not sure about the rest of the countries, but the United Stated Federal Reserve prrrrinted inordinate amounts of U.S. Dollars to stimulate the economy, with plans to print trillions more under President Biden. All the prrrrinting and a falling GDP MIGHT be the seeds for the worst situation of an Economic Crisis. HYPERINFLATION.

Bitcoin has been criticized as a medium “for speculation”. Big test. Is it just merely “for speculation”, or an actual “safe haven”? Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

We had big test in March last year when covid crash happened. Bitcoin went from $9000 to $5000 in a week. So value of Bitcoin almost halved. At same time Gold went from $1680 to $1480. So a 12% drop. This is huge difference. And it matters a lot to people that want to hedge against economic crashes. It i s much better to lose 12% then 45%

[jaysabi]

I am starting to believe that Satoshi created Bitcoin for what’s coming next, or might come next. Because of the COVID-19 pandemic, I’m not sure about the rest of the countries, but the United Stated Federal Reserve prrrrinted inordinate amounts of U.S. Dollars to stimulate the economy, with plans to print trillions more under President Biden. All the prrrrinting and a falling GDP MIGHT be the seeds for the worst situation of an Economic Crisis. HYPERINFLATION.

Bitcoin has been criticized as a medium “for speculation”. Big test. Is it just merely “for speculation”, or an actual “safe haven”? Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

Considering how everyone was running away from bitcoin in March 2020 along with every other financial asset, I'd say it's not there. That was the closest thing to the big test we've had sine Bitcoin was introduced. Economic uncertainty, falling stock prices, capital flight to safety.  And where did the capital flee to?  Not bitcoin.  Bitcoin suffered 30-40% drops from mid February 2020 to mid-March 2020 as lockdowns started and economic fear about the future was at it's highest and governments started talking about firing up the money printer.  Under the theory that bitcoin is actually a safe haven, this should have sent the shares sky high, not crashing.  But that's not what happened.  Bitcoin has since undergone the same extreme asset appreciation we've seen in many other speculative assets like tech equities.  The price growth has been about the same, with bitcoin up about 4.5x since the mid-Feb crash, the same ballpark as most speculative tech stocks which are also up 3.5x-4.5x since then. In this regard, the returns from bitcoin aren't even special, they just track a larger overall trend, yet bitcoin gets the majority of the attention because of how vocal the community is.  However, objectively speaking, the conclusion is pretty clear- not a safe haven, driven by speculation still. 

[slapper]

Those immoderate printed USD only brings bad impacts on the economy in the long term even though Biden can stimulate the initial life standard during covid-19. God, they only stick to printing money without thinking of the consequences. People who receive money will be possible to manage their life for a couple of months but after that, what will they do if the economy remains stagnant? Moreover, the more money is printed, the less valuable it will be. Thus, things increase the price a lot which makes workers with normal income harder to buy anything.

Bitcoin has long become one of the best safe havens for people to store their money although it might still fluctuate during hard times. But when we analyze the long-term chart, there is no doubt that bitcoin is on a right track.

[LUCKMCFLY]

I am starting to believe that Satoshi created Bitcoin for what’s coming next, or might come next. Because of the COVID-19 pandemic, I’m not sure about the rest of the countries, but the United Stated Federal Reserve prrrrinted inordinate amounts of U.S. Dollars to stimulate the economy, with plans to print trillions more under President Biden. All the prrrrinting and a falling GDP MIGHT be the seeds for the worst situation of an Economic Crisis. HYPERINFLATION.

Bitcoin has been criticized as a medium “for speculation”. Big test. Is it just merely “for speculation”, or an actual “safe haven”? Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

Considering how everyone was running away from bitcoin in March 2020 along with every other financial asset, I'd say it's not there. That was the closest thing to the big test we've had sine Bitcoin was introduced. Economic uncertainty, falling stock prices, capital flight to safety.  And where did the capital flee to?  Not bitcoin.  Bitcoin suffered 30-40% drops from mid February 2020 to mid-March 2020 as lockdowns started and economic fear about the future was at it's highest and governments started talking about firing up the money printer.  Under the theory that bitcoin is actually a safe haven, this should have sent the shares sky high, not crashing.  But that's not what happened.  Bitcoin has since undergone the same extreme asset appreciation we've seen in many other speculative assets like tech equities.  The price growth has been about the same, with bitcoin up about 4.5x since the mid-Feb crash, the same ballpark as most speculative tech stocks which are also up 3.5x-4.5x since then. In this regard, the returns from bitcoin aren't even special, they just track a larger overall trend, yet bitcoin gets the majority of the attention because of how vocal the community is.  However, objectively speaking, the conclusion is pretty clear- not a safe haven, driven by speculation still. 

Assuming that it is a fact that the printing of cash bills causes a great excessive inflation that is not controlled except to generate liquidity in the governments, the damage is experienced by the people who depend on this traditional economy, which will always keep them in debt, on the other hand, cryptocurrencies and bitcoin escape from any inflationary system, in the pandemic it was observed that all stock markets fell, even bitcoin suffered, but the Bitcoin market followed by gold, were the markets that recovered the fastest , The reason is simple, the economy was on the verge of a world crash, bitcoin and gold functioned as a safe haven for money, protecting value is not far-fetched in these times.

[Lucius]

We had big test in March last year when covid crash happened. Bitcoin went from $9000 to $5000 in a week. So value of Bitcoin almost halved. At same time Gold went from $1680 to $1480. So a 12% drop. This is huge difference. And it matters a lot to people that want to hedge against economic crashes. It i s much better to lose 12% then 45%

There is no point in comparing gold and BTC, never, not even in the case when the market collapses as it did in March last year. I can also say the following: How much has the price of BTC risen over a period of one year - more than 400% - and gold, if I'm not mistaken, has gone up by only about 5% (today's price $1734).

People who want stability and can't stand volatility will always choose gold - others know that BTC has always been something to be trusted from the very beginning until today.

[Coyster]

We all know 99% of the people who are investing in bitcoin or any cryptocurrency is looking for a mere cashout when they make 2x or 3x but some good old guys and the rest of the 1% know that Bitcoin was created to be a digital and decentralized version of our currency.

While it's true that quite a lot of people are in the network to make ROI from it's spontaneous appreciation in price, that in itself is productive for the network, I think some of the newcomers like myself who now believe in Bitcoin as a currency that gives freedom, control and eliminates manipulation, started of with a wrong perception of the network as a 'get rich quick scheme', what I'm saying is that with time, many people who are Investing in Bitcoin just for ROI would little by little start appreciating the network, cause to use Bitcoin, you definitely have to understand a bit of it, the more that understanding grows, the more that misconception is corrected. I for one believe that people should use the network for whichever reason possible, that appreciates adoption, and the network benefits massively from that as it moves towards mainstream adoption.

Unless and until common people don't come out of the matrix world they live in (considering fiat as better currencies) they are doomed.

I second this, I think part of the problem is the 'complicated' nature of 'being your own bank' with Bitcoin, most people find the risk concern to do that quite overwhelming and thus desist from the network, it's basically clear to majority of people that Fiat and it's inflation is a problem now and in the future, but they wouldn't use Bitcoin cause the media have 'heightened' the risk in it, without highlighting the basic security protocols to protect ones funds, that's why Bitcointalk as a forum is so important for every Bitcoiner.

[yhiaali3]

This is a really big question, the following days will show the mistake of the US Secretary of the Treasury and all those who said that Bitcoin is a means of speculation only and will discover that Bitcoin is considered a store of value and a safe haven when these economies begin to collapse as a result of printing trillions of banknotes, unfortunately they cannot see this simple fact.

[jaysabi]

I am starting to believe that Satoshi created Bitcoin for what’s coming next, or might come next. Because of the COVID-19 pandemic, I’m not sure about the rest of the countries, but the United Stated Federal Reserve prrrrinted inordinate amounts of U.S. Dollars to stimulate the economy, with plans to print trillions more under President Biden. All the prrrrinting and a falling GDP MIGHT be the seeds for the worst situation of an Economic Crisis. HYPERINFLATION.

Bitcoin has been criticized as a medium “for speculation”. Big test. Is it just merely “for speculation”, or an actual “safe haven”? Will Bitcoin crash together with the rest of the economy, or will everyone run to it as a Store of Value?

Considering how everyone was running away from bitcoin in March 2020 along with every other financial asset, I'd say it's not there. That was the closest thing to the big test we've had sine Bitcoin was introduced. Economic uncertainty, falling stock prices, capital flight to safety.  And where did the capital flee to?  Not bitcoin.  Bitcoin suffered 30-40% drops from mid February 2020 to mid-March 2020 as lockdowns started and economic fear about the future was at it's highest and governments started talking about firing up the money printer.  Under the theory that bitcoin is actually a safe haven, this should have sent the shares sky high, not crashing.  But that's not what happened.  Bitcoin has since undergone the same extreme asset appreciation we've seen in many other speculative assets like tech equities.  The price growth has been about the same, with bitcoin up about 4.5x since the mid-Feb crash, the same ballpark as most speculative tech stocks which are also up 3.5x-4.5x since then. In this regard, the returns from bitcoin aren't even special, they just track a larger overall trend, yet bitcoin gets the majority of the attention because of how vocal the community is.  However, objectively speaking, the conclusion is pretty clear- not a safe haven, driven by speculation still.  

Assuming that it is a fact that the printing of cash bills causes a great excessive inflation that is not controlled except to generate liquidity in the governments, the damage is experienced by the people who depend on this traditional economy, which will always keep them in debt, on the other hand, cryptocurrencies and bitcoin escape from any inflationary system, in the pandemic it was observed that all stock markets fell, even bitcoin suffered, but the Bitcoin market followed by gold, were the markets that recovered the fastest , The reason is simple, the economy was on the verge of a world crash, bitcoin and gold functioned as a safe haven for money, protecting value is not far-fetched in these times.

This isn't true in the least. Bitcoin fell faster and harder than the stock market at the start of the pandemic, and has retraced the same shape as other speculative assets since. At no time was it functioning as a safe haven and you can't even say it is now because it's risen in the same proportion as other speculative assets.  If its price movements are not unique, there is nothing to differentiate it from the other assets classes and no evidence it's being treated as a safe haven unless you're also going to argue that tech stocks are also a safe haven because they've experienced the same proportional price increase as bitcoin during the pandemic.  (And that's ridiculous.)

[Heisenberg_Hunter]

...snip...

Store of Value concept has been varying ever since the early days of gold standard and when monetary economics came to practice. Initially money was tied to gold and when World War I came, gold standard was removed and US started printing more to pay for the expenses. Gold faced a severe volatility and then it had a market of its own. Today we can see they are being used heavily in jewelry, bullions etc and other store of value items like bond, real estate and collectibles started having a market of its own.

With it's extremely poor scalability issue, bitcoin has been seen as a perfect store of value rather than a currency, but what is the purpose of bitcoin if it's not being used as a currency  just holding trillions? If most of us consider it as a store of value or a digital alternative to gold, then probably we need to stop thinking of scalability but rather find ways to accumulate sats! Truly speaking, the use case of bitcoin has heavily shifted from what satoshi envisioned while launching the network.

[AndySt]

With it's extremely poor scalability issue, bitcoin has been seen as a perfect store of value rather than a currency, but what is the purpose of bitcoin if it's not being used as a currency   just holding trillions? If most of us consider it as a store of value or a digital alternative to gold, then probably we need to stop thinking of scalability but rather find ways to accumulate sats! Truly speaking, the use case of bitcoin has heavily shifted from what satoshi envisioned while launching the network.

I think that it is worth forgetting about other options for using bitcoin other than as a means of speculation and investment in the near future. Yes, the founding fathers of bitcoin, led by Satoshi or someone else, put a different meaning, and it was the use of bitcoin as a currency or even a substitute for fiat currencies in certain conditions, but life ordered otherwise. The water flows in the direction where there is the least resistance, and given the small enthusiasm of the governments of the countries about creating a competitor to fiat currencies, we have what we have.

[Shasha80]

Bitcoin was launched on January 3, 2009, this means that there is a possibility that Satoshi Nakamoto was inspired by the global economic crisis
that occurred in 2008. Which means that since the beginning Bitcoin was designed as a solution to overcoming the economic crisis, then proven
again when the economic crisis occurred in 2020 due to the COVID-19 pandemic. Bitcoin can be a safe haven as the price continues to rise,
while other assets have decreased performance.

So if the next economic collapse occurs with the government continuing to print money with the intention of restoring the economy. I think it's clear
Bitcoin will become a safe haven again, actually seeing Bitcoin's performance this year it is very clear that Bitcoin can be a solution to the economic
crisis that has occurred. In fact I got lucky by moving all of my fortune earlier this year from the bank to Bitcoin. Because now my wealth is increasing.