Surge in Bankruptcy Filings And Economic Crisis Vs Recession Vs BTC Price

[Sayeds56]

While Bitcoin's correlation with the traditional financial market rises and falls, it has more or less been established that influential macroeconomic trends can certainly affect Bitcoin. Bitcoin isn't anymore the isolated independent island that it may have been perceived. Although there's still a considerably amount of fluidity or unpredictability in Bitcoin's relationship with the traditional financial market, I don't think it won't be affected by such a huge economic crisis as a market crash in no less than the US. And considering how institutions are already part of the game, there will certainly be a significant sell off.

Your observation is valid about correlation between Bitcoin and traditional risky markets,  highlighting how it can change with shifts in fundamentals of Bitcoin. I think it is also possible that once the market capitalization of Bitcoin approaches close to $6 trillion (estimated) similar to Forex market, it will become more stable and its price fluctuations will primarily influenced by its intrinsic strengths and weaknesses, rather than external factors tied to traditional financial markets.

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[franky1]

whenever you see small businesses file bankruptcy.. most of the time its for them to write off debt and start the same service/product under a different brand the following month.. thus no societal harm to employees/customers

however when you see national chains go bankrupt. the big thing people need to look into is the pension fund deficit.. yes employees dont lose their jobs but find out the CEO has been syphoning off their pension deposits too

here in the UK a national chain called wilko's resently went into administration but the biggest story is that for its 2000 employees it has a massive £58m-£76m pension deficit.. yep £29,000-£38,000 pension loss per average employee.. which is alot of money

what we around the world experienced in 2008 with the real estate fiasco. we will start to see with the pensions deficit in the next decade

i know most americans will say they dont care because they have protected private 401k's but even they are at risk..
i just checked a US national chain that went into administration (bed bath& beyond) and even they have linked in some pension warnings
https://www.theretirementgroup.com/featured-article/5448093/attention-bed-bath-beyond-employees-vanguard-report-reveals-significant-decline-in-401k-balances-over-two-years?hsLang=en
heres the comedy

Diminishing 401k Assets:

According to Vanguard, a prominent investment funds giant, the average balance in 401k and 403b plan accounts has decreased from $141,542 in 2021 to $112,572, representing a 20% loss over a two-year period. Median balances have also been affected, dropping from $35,345 to $27,376 for retirement account clients. The primary reason for this decline is the poor performance of equity and bond markets. Additionally, inflation, which reached a 40-year high in 2022, remains a concern for both policymakers and households. The impact of rising interest rates, particularly in the mortgage sector, has further contributed to the decline in 401k assets

inflation does not make peoples account balance diminish.. $141k would still be $141k but how many loaves of bread or sports cars you can buy with it would be less .. but when they say money has escaped the accounts leaving individuals with less funds on average.. that means companies have been taking money out/losin money.. but not from inflation

[dothebeats]

Diminishing 401k Assets:

According to Vanguard, a prominent investment funds giant, the average balance in 401k and 403b plan accounts has decreased from $141,542 in 2021 to $112,572, representing a 20% loss over a two-year period. Median balances have also been affected, dropping from $35,345 to $27,376 for retirement account clients. The primary reason for this decline is the poor performance of equity and bond markets. Additionally, inflation, which reached a 40-year high in 2022, remains a concern for both policymakers and households. The impact of rising interest rates, particularly in the mortgage sector, has further contributed to the decline in 401k assets

inflation does not make peoples account balance diminish.. $141k would still be $141k but how many loaves of bread or sports cars you can buy with it would be less .. but when they say money has escaped the accounts leaving individuals with less funds on average.. that means companies have been taking money out/losin money.. but not from inflation

You have a good point and sort of reminder here. People seem to think that inflation means their money in their savings account will diminish or their annual salary from their job will dramatically go down. What it is really is though is that their income is turning to not be enough with price hikes due to inflation. The example is as simple as you have stated it to be, you will still have the same amount of money but the quantity and quality of the products and services that same amount will get you will be drastically different due to inflation. Perhaps some of us needs a reminder of what inflation does to our money, cause it seems like they are blaiming it for everything these days (although I cannot deny that is is and has been a source of a lot of problems too).

[icalical]

I am not really surprised by that data, I don't mean that I know beforehand, but I already saw mass layoff by several big companies happened several times since earlier this year. Especially companies that operating around Southeast Asia, it's where I live. I also work in marketing agencies, so I realize that companies are cutting their marketing budget.

Will this affect the price of BTC too. If the entire market falls, does it rule out the possibility that there will be a sell off too? and of course BTC will also be affected?

I think everyone realize that it's different now, previously before covid, when stock market and economy in general is falling people are turn their speculation to Bitcoin, but the current Bitcoin price is already so high for people to do that again. On the latest stock market crash after covid Bitcoin are joining the bear market, so if the situation get worse, Bitcoin could probably pretty much affected.

[jaberwock]

I am not really surprised by that data, I don't mean that I know beforehand, but I already saw mass layoff by several big companies happened several times since earlier this year. Especially companies that operating around Southeast Asia, it's where I live. I also work in marketing agencies, so I realize that companies are cutting their marketing budget.

It's expected that when a company does badly, the workers are the first ones to go. The reason for this is that when you hire a lot of people, that is because you expected growing profits and that means that if you have more workers then you would be able to pay them with your growing profits and then make some more on top of that.

But, if you hired them, and didn't make that profit, that means you need to fire them to get back to what you should be having instead of what you had, otherwise you are going to keep losing more and more money. Salary is a big cost, usually bigger than anything else, and that would mean that if you do it smartly then you could make a profit back again when you drop that number down.

[dezoel]

I don't think this bankruptcy and troubled economic situation will have that kind of effect on bitcoin price at least not now that most people have DCA in btc in expectation of btc price surge after halving next year. Moreover, in 2020 COVID-19 didn't bring the price of bitcoin. In fact bitcoin became safe heaven for investors who feared their fiat would be worthless as inflation was gradually increasing because economies got shot down leading to increase in prices of goods. So I don't think bankruptcy will disrupt the price increase of bitcoin because investors would like to leverage fiat they have on btc and that should cause more appreciation of price of btc.

Bankruptcy is more of a personal problem but there are still workers on a company and they can not invest in BTC once they got fired, so it may affect the BTC price. Economic issues can be global. This is the ones that can affect the price of BTC the most but it won't last long.

People into DCA is not a new thing but yeah it helps a lot so that the price won't totally collapse in the bad times. Given that DCA is not a new thing, people have more expectations beyond halving. You got a point there about the Covid and its effect in BTC. I think this is also because people are mainly doing online transactions because there are lockdowns and quarantines that time.

[Jatiluhung]

I don't think this bankruptcy and troubled economic situation will have that kind of effect on bitcoin price at least not now that most people have DCA in btc in expectation of btc price surge after halving next year. Moreover, in 2020 COVID-19 didn't bring the price of bitcoin. In fact bitcoin became safe heaven for investors who feared their fiat would be worthless as inflation was gradually increasing because economies got shot down leading to increase in prices of goods. So I don't think bankruptcy will disrupt the price increase of bitcoin because investors would like to leverage fiat they have on btc and that should cause more appreciation of price of btc.

Bankruptcy is more of a personal problem but there are still workers on a company and they can not invest in BTC once they got fired, so it may affect the BTC price. Economic issues can be global. This is the ones that can affect the price of BTC the most but it won't last long.

People into DCA is not a new thing but yeah it helps a lot so that the price won't totally collapse in the bad times. Given that DCA is not a new thing, people have more expectations beyond halving. You got a point there about the Covid and its effect in BTC. I think this is also because people are mainly doing online transactions because there are lockdowns and quarantines that time.

The spike in BTC prices during the Covid pandemic was indeed a time when many people were staying at home due to lockdown and quarantine. So at that time the inflow of money towards high risk investments experienced a high spike. And not only for crypto and BTC but also for the online gaming industry which experienced a fairly high increase in users during Covid. This halving may have a slightly different cause that will bring about an increase in the price of BTC. Namely, currently we know that many institutions are trying to re-enter BTC investments. In fact, several large companies have also applied for a Bitcoin Spot ETF, which is certain that when the SEC receives the application, a surge in BTC prices will also occur. The bankruptcies of many large and small banks and companies that will occur in 2023 also seem to have an effect on the rate of bitcoin prices. But I saw that when several banks went bankrupt what happened was that a lot of money went into the realm of investing in bitcoin and gold. We can see its history in the market. When there is an announcement of the bankruptcy of a bank, there is actually more money flowing into gold and BTC. So talking about impacts is always there. But we don't know whether this impact will be negative or positive. Maybe if a factory company or something went bankrupt which resulted in many employees being laid off then maybe that would have a negative impact.

[Betwrong]

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https://twitter.com/WhaleWire/status/1705776976089256341?t=PtzaGiRaDcbdjzwFDYF3Bg&s=19

There is data from WhaleWire regarding the surge in corporate bankruptcy filings which reached the same level as past economic crises such as the Great Recession in 2008 and the pandemic in 2020. This certainly raises concerns for the world economy.

And periods like this historically occur before significant stock market crashes. Will this affect the price of BTC too. If the entire market falls, does it rule out the possibility that there will be a sell off too? and of course BTC will also be affected?

Share your opinion

If it happens, it will affect BTC price, but, I think, in positive ways. If fiat currencies lose their value, it's only logical to accumulate Bitcoin in times like that. Why it should be affected negatively I don't understand. One of its purposes is to serve people during economic crisis in their countries, to help them to survive. Remember Zimbabwean trillions? If Bitcoin was around at that time many people would be saved financially.

[davis196]

And periods like this historically occur before significant stock market crashes. Will this affect the price of BTC too. If the entire market falls, does it rule out the possibility that there will be a sell off too? and of course BTC will also be affected?

Of course that a stock market crash and a big recession/depression will negatively affect the Bitcoin price.
Bitcoin reached historically high prices in times of very low interest rates, when the financial markets were flooded with newly printed money by the Federal Reserve and the other central banks. The times of "easy money" and low interest rates are gone(for a while) and this leads to multiple companies going bankrupt and to prices of financial assets going down.
We might be witnessing a stock market crash in 2024, but the Federal Reserve will have to stop it by discontinuing the interest rate hikes and start "saving the economy" by pumping more newly printed money into the financial markets.

[Betwrong]

And periods like this historically occur before significant stock market crashes. Will this affect the price of BTC too. If the entire market falls, does it rule out the possibility that there will be a sell off too? and of course BTC will also be affected?

Of course that a stock market crash and a big recession/depression will negatively affect the Bitcoin price.
Bitcoin reached historically high prices in times of very low interest rates, when the financial markets were flooded with newly printed money by the Federal Reserve and the other central banks. The times of "easy money" and low interest rates are gone(for a while) and this leads to multiple companies going bankrupt and to prices of financial assets going down.
We might be witnessing a stock market crash in 2024, but the Federal Reserve will have to stop it by discontinuing the interest rate hikes and start "saving the economy" by pumping more newly printed money into the financial markets.

"For a while" is the key here, in my opinion. Times of low interest rates will be here again, and not once, and at least those times we can expect new all time highs, but not only during those times. The fourth Bitcoin halving is coming. This can incentivize people to buy BTC while it's relatively cheap. Should we believe that Bitcoin will never be over $60k again? I don't think so. We'd been there when BTC reached $1, then $100, then $1,200, then $20k ... Each time skeptics were saying that Bitcoin was grossly overpriced, and yet we all know what happened some time after that.