How would a global economic recession affect Bitcoin's price?

[Abiky]

There have been talks among experts of a global economic recession taking place soon. The COVID-19 pandemic, the persisting Russia-Ukraine crisis, and several other factors will lead us there faster than you could imagine. Considering that the US Dollar is the world's reserve currency, anything that affects its value (inflation) will have a chain effect over other countries' economies as well. Now this could have profound effects over Bitcoin's price within the short term, as the crypto market "mimics" equity/stocks market's behavior. It's most probably Bitcoin will decline well below $10k, as the global economy comes to a halt. Or things could head in the other direction, leading Bitcoin towards new All-time-highs. The pioneer cryptocurrency has often been hailed as a "safe haven", so it should be able to serve as an alternative to Fiat during times of crisis.

What are your thoughts?

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[Ahli38]

However, the economic recession will certainly have an impact on all fields. Because the economic recession itself is closely related to an increase in the unemployment rate, a decrease in retail selling prices, to a slowdown in economic activity. And of course it can affect the bitcoin market. because the decline in people who invest will be felt when this economic recession lasts. so that people will spend more money to meet the needs of their daily life. and there will be little left for investment. even on a worse scale can make people no longer able to invest and even withdraw their investment. But that's if the real economic review occurs. and it can be said very close to the possibility of happening because the economic review itself is a period of weakening the economy that lasted for two consecutive quarters.

[amishmanish]

When global recession come every market falls. because banks pull out money supplies to control inflations, interest rates rise and investments fall. This is a general trend. Now if a recession come it will be first for bitcoin. I believe during recession many companies layoff their best people. I believe such people will engage themselves in web 3.0, for money. There will be expansion of blockchain ecosystem, the bitcoin will surge and once again people who are critic will say its all imaginary, but bitcoin will go to moon.

[mk4]

The pioneer cryptocurrency has often been hailed as a "safe haven", so it should be able to serve as an alternative to Fiat during times of crisis.

In terms of market movement — it could potentially be a safe haven in the future when the market matures more, but most probably not a good save haven in the next few years for the reasons you've mentioned.

[jossiel]

There have been talks among experts of a global economic recession taking place soon.

Isn't it occurring as we talk?

The COVID-19 pandemic, the persisting Russia-Ukraine crisis, and several other factors will lead us there faster than you could imagine. Considering that the US Dollar is the world's reserve currency, anything that affects its value (inflation) will have a chain effect over other countries' economies as well. Now this could have profound effects over Bitcoin's price within the short term, as the crypto market "mimics" equity/stocks market's behavior. It's most probably Bitcoin will decline well below $10k, as the global economy comes to a halt. Or things could head in the other direction, leading Bitcoin towards new All-time-highs. The pioneer cryptocurrency has often been hailed as a "safe haven", so it should be able to serve as an alternative to Fiat during times of crisis.

What are your thoughts?

Whatever happens, plan yourself on how long you're willing to stay holding bitcoin. Long term is still the best decision while holding it just to avoid being worried with the current world events.

Also, there's the China-Taiwan tension and that's also something that we don't want to happen and sure the economy of most countries ties to the both of it will definitely be affected too.

[Poker Player]

There have been talks among experts of a global economic recession taking place soon.

You say it as if it will be a very different thing from what is there now, and it is not. A recession is defined as GDP falling two quarters in a row and we are on our way, we are not far off. So, recession will simply be the realization of what we are seeing.

Monetary policy, energy prices and inflation have already affected the price of Bitcoin. That the recession will be confirmed is not going to affect it much more.

It's most probably Bitcoin will decline well below $10k, as the global economy comes to a halt.

I doubt very much that it will halt, and if that happens, the S&P will drop below 2,000 points, etc. It won't be bitcoin alone that will continue to go down and it would be a disaster. But I see that as unlikely.

[newdevices]

The pioneer cryptocurrency has often been hailed as a "safe haven", so it should be able to serve as an alternative to Fiat during times of crisis.

In terms of market movement — it could potentially be a safe haven in the future when the market matures more, but most probably not a good save haven in the next few years for the reasons you've mentioned.

Currently, the market is still very volatile and its movements are difficult to predict.
so we need to know that for now crypto is not a safe haven and may need to wait for the market to stabilize again,
but indeed we need to see it in the long term

[freedomgo]

Crypto market is different compared to stocks because people see it as a safe haven for their investment.

We have passed many economic problems already and yet the market is still here and it's still profitable to invest in.
remember when covid-19 was first announced? people panic and there's a problem with global economic but bitcoin soar and even achieve its new ATH.

[mk4]

so we need to know that for now crypto is not a safe haven and may need to wait for the market to stabilize again,

Stabilize again? Especially when talking about crypto in general (crypto was and is never a safe haven), since when did bitcoin and crypto stabilize in the first place? It was never stable in any timespan besides a few days up to a week.

[davis196]

1.The US dollar is doing pretty well in 2022. The war in Ukraine helped for the drop of the Euro, so the US dollar is actually stronger than before. The Federal Reserve increasing the interest rates might add more value to the US dollar.
2. Everyone is talking about recession, but the recession might not come. There might be a negative net economic growth, which means bigger inflation and lower economic growth. Stagflation is also an option, but we don't know if the Saudi Arabians won't decide to increase oil production. The disruption of the supply chains is something that creates problems right now, but the global economy will adapt and new supply chains will be created.
3. The Bitcoin price might go down or it might do up. Nobody knows what will happen so all the opinions here are mostly guessing and fantasizing. If the global economy starts growing with a faster temp, the Bitcoin price will go up. If there's recession/stagflation, the crypto winter will continue.

[Mauser]

What are your thoughts?

The fear of an economic slowdown is what send all the risky assets crashing down this year, crypto currencies are part of these assets. A recession now would make exeything worse because economies would contract, leaving the consumers struggling even more. One the one side we have rising inflation which makes living expenses rise and on the other side we have worse outlooks for the  future. I would expect asset prices to drop future as investors are heading for save investment. The problem is that safe investment don't work during high inflation times, their return is not enough to cover the rise in prices. That's why I think we will see more demand crypto currencies the higher inflation rises. The independence of crypto currencies is what makes them protect us against inflation and losing value in fiat money.

[naira]

To stop inflation, the world bank stopped the circulation of money by stopping printing. but can't completely stop the money they've printed. When interest rate increases in the past have shown price volatility which has resulted in large withdrawals of money from exchange to fiat to meet standard interest costs.

Bitcoin is not the only one that will fall into a recession, but all investment assets traded on exchanges will experience a significant price depression. Inflation prevention in each country will run slowly, where the price hike in the market will also trigger a delay in the ups and downs of unstable prices.

[Upgrade00]

A global recession hits every market as it affects the spending capability of the community; This reduces how much money people have to put into different assets and usually slows demand and reduces the price.

To understand how this could affect Bitcoin, we can take a look at the 2020 crisis, where there was total and partial lockdown in most places, slowing economies to a halt, Bitcoin however maintained a fairly stable price and acted as a sort of hedge funds for most, while many other assets were going to the ground.

This of course, does not mean bitcoin is resistant to market crisis, the reaction would not always be the same.It's also important to note, that BTC has its market cycles, so drops and spikes are not always the result of any particular cause.

[Flexystar]

We already seeing that effect in the crypto space. Many exchangers are laying off their employees. With that said in the upcoming days things would be worst in terms of job placement. Job is the first thing which keeps everyone alive because that’s how we get paid and spend!

However, the price of bitcoin is different story. Prices would get affected if investors stop investing and users stop using the crypto currencies during the recession.

[mk4]

We already seeing that effect in the crypto space. Many exchangers are laying off their employees. With that said in the upcoming days things would be worst in terms of job placement. Job is the first thing which keeps everyone alive because that’s how we get paid and spend!

To be fair, the job layoffs are mostly with high growth-focused tech companies in general, not necessarily exchange companies.

And apparently, Binance is still hiring despite the market turmoil. https://twitter.com/cz_binance/status/1537013824666095617

[fiulpro]

The price is already been affected we see the market going down and up, the volatile erratic nature is becoming super normal right now. I do think that the most important thing is understanding the fact that market is not permanent so it would eventually become more stable with time.

Therefore I do understand the implications of the price decreasing with the recession but I do think we all just need to HODL and take advantage of the price at the moment , one can also combine it with trading and still earn.

With recessions ofcourse everything will go down.

[avikz]

There have been talks among experts of a global economic recession taking place soon. The COVID-19 pandemic, the persisting Russia-Ukraine crisis, and several other factors will lead us there faster than you could imagine. Considering that the US Dollar is the world's reserve currency, anything that affects its value (inflation) will have a chain effect over other countries' economies as well. Now this could have profound effects over Bitcoin's price within the short term, as the crypto market "mimics" equity/stocks market's behavior. It's most probably Bitcoin will decline well below $10k, as the global economy comes to a halt. Or things could head in the other direction, leading Bitcoin towards new All-time-highs. The pioneer cryptocurrency has often been hailed as a "safe haven", so it should be able to serve as an alternative to Fiat during times of crisis.

What are your thoughts?

On the contrary, bitcoin should flourish during a global recession. It doesn't matter whether bitcoin will be considered as a safe heaven or not, but the falling value of fiat currencies may drive up the price if the demand stays strong. But a recession is unpredictable so anything can happen in reality. But if I have to speculate, I will bet on positive outcome for crypto during a global recession.

[franky1]

best way to view it..

use the "bread loaf" value

imagine there was no bitcoin trade at all. no volatility due to people wanting bitcoin or not and bitcoin got pegged to a fixed value..
like a loaf of bread being $2 so the price at the moment is about 11,000 loaves of bread..

in 5-10 years imagine bread was $10
the fiat value of common things would be 5x more also.
meaning people would sell bitcoin for over $100k. just to stay at same value.

now add back in the inconsistencies of the market.
electric prices are going up. meaning miners costs are going up. this means they wont sell for less value than this years low
also those small hobby miners with higher residential electric wont mine. and instead they would buy, because its cheaper to buy coin right now compared to paying their electrical provider to mine bitcoin
so even more push up of the bitcoin market price.

then there are the FIAT bank savers. realising if they held onto $10k. they cn buy 5k loaves today but only 1k loaves of bread if they just kept their fiat as fiat. so they are in dire need to spend their fiat now on things they may want in 10 years time. because its cheaper to buy them now.
or they will invest their savings in a store of value that hedges against inflation if they dont have real world things to buy and instead want to safeguard their savings.... and yep, bitcoin springs to their mind.
so even more buyers. meaning more support for a price rise.

what you are seeing this month. is not an expectation of long term trends of a down action of bitcoin price.
what is happening is those that were considering to save up for a mortgage in 10 years or buy a car. are rushing now to do so now by converting their stored value to spend it all now. so that in 10 years time they are not having to have a price ticket of 5x if they waited to buy later.

right now. the temp holders/ the short term investors are exiting. but those that hold will reap the rewards for holding over the long term.

in short if you dont need to buy anything expensive in the next couple years hoard your coin. if you NEED to buy expensive things in the next year or so. spend your fiat now, get it while its cheap. because your fiat wont buy it all in a few years. it will cost you more fiat later

[Husires]

It depends on your description of a global crisis and how to deal with it. Trying to compare Bitcoin with stocks is fundamentally flawed because of the real differences between the two originals, as is trying to compare it with gold.

If the crisis is related to liquidity or a real problem in the economy, you will find that many have moved away from high-risk investments, and therefore the value of Bitcoin will decrease.
But if it is related to a specific activity or crisis, we may witness the opposite.

[Majestic-milf]

The pioneer cryptocurrency has often been hailed as a "safe haven", so it should be able to serve as an alternative to Fiat during times of crisis.

In terms of market movement — it could potentially be a safe haven in the future when the market matures more, but most probably not a good save haven in the next few years for the reasons you've mentioned.

I don't see BTC as a safe haven in the sense that you purchased it when it was low, say 8k dollars and it eventually rises to a 100k, you make a transaction, the person on the other end pays you at the rate it is valued, but in a situation where it drops to say 99k, you run a loss.