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What do you think will happen to crypto currency during a recession? The next recession will be our first since Bitcoin was created. My prediction is you see a

What do you think will happen to crypto currency during a recession? The next recession will be our first since Bitcoin was created. My prediction is you see a spike up early, as people get desperate for a profitable trade, then they all plummet as people flee for safety.

cableshaft 9y ago
I don't think they'll totally plummet, but yeah, I think it will cause another run, and then some form of correction. But I'm not sure where they're going to put their money into if stocks are freefalling for awhile. They may just keep them in cryptocurrency until they think the stocks have hit the bottom and decide to start buying again.
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lifty 9y ago
I look at crypto as a deflationary asset class that can't be influenced by central banks as much, so they might withstand the credit contraction cycle rather well. There are factors that make the whole equation complicated like: regulation, small market cap, hype, relative novelty etc.
delazeur 9y ago
For certain millennials, crypto-currency already seems to hold the role that gold does for certain baby boomers. I would expect that phenomenon to grow during a bear market.
- justadeveloper2 9y ago
  Man, I just see massive heartache and disappointment for them at some point in the future.
  - RationPhantoms 9y ago
    Yeah there have been quantifiable "bubble bursts" multiple times. It's like multiple, concussive "Stock and awe" campaigns where the price has plummeted by $600 per coin. Everytime that happens, the subreddit for /r/bitcoin posts the national suicide hotline and the price rallies in 4 months.
fullshark 9y ago
I think they will plummet because the main driver of interest is speculation at the moment.
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jondubois 9y ago
Bitcoin didn't exist during the first recession, but other virtual currencies did such as Linden Dollars in Second Life. Apparently the Linden dollar crashed not long before the 2008 financial crisis hit - A virtual bank in SL went bankrupt because of a virtual 'run on the banks'. I think the same might happen with crypto-currencies but they'll bounce back.
ojr 9y ago
seeing that Koreans is the majority of the crypto market cap not Americans and South Korea was one of the few countries that was not in a recession in 2008, I am not sure why the price of bitcoin cash will plummet
mathgenius 9y ago
Much of crypto is tied to the tech sector, so i would expect that to go south. But assets like bitcoin might weather the storm better, being more purely "store of value" like gold.
mrep 9y ago
Crash. People will lose their jobs and have to dip into their savings/investment to cover their day to day expenses. Those that have bitcoin will have to sell some to cover their cash expenses thereby flooding the market.
- Jordy_Man 9y ago
  If (# of bitcoin holders losing jobs) > (# of people wanting to hedge against their Fiat currency): Print(Bitcoin will Crash!) Else: Print(Bitcoin will boom!)
1001101 9y ago
Depends on what happens during the recession. If it's like the last one where we went from >5% fed funds to 0% (we're at 1% right now), and increased the fed's balance sheet to the tune of 4T through QE, and the national debt by 15T, Bitcoin is going to look very, very shiny. If we go negative interest rates, that's going to give Bitcoin a positive carry. I'm dollar hedged right now for this very reason. We'll see what happens. I'm watching China credit impulse and CNY/USD pretty closely, and of course, trying to stay on top of the black swans (eg. N. Korea). I'm not too worried about the US economy - US financial markets, on the other hand, have Trump tax cuts priced in at 30X CAPE, so he needs to deliver on that, or...

cableshaft 9y ago

I don't think they'll totally plummet, but yeah, I think it will cause another run, and then some form of correction. But I'm not sure where they're going to put their money into if stocks are freefalling for awhile. They may just keep them in cryptocurrency until they think the stocks have hit the bottom and decide to start buying again.

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lifty 9y ago

I look at crypto as a deflationary asset class that can't be influenced by central banks as much, so they might withstand the credit contraction cycle rather well. There are factors that make the whole equation complicated like: regulation, small market cap, hype, relative novelty etc.

delazeur 9y ago

For certain millennials, crypto-currency already seems to hold the role that gold does for certain baby boomers. I would expect that phenomenon to grow during a bear market.

justadeveloper2 9y ago
Man, I just see massive heartache and disappointment for them at some point in the future.
- RationPhantoms 9y ago
  Yeah there have been quantifiable "bubble bursts" multiple times. It's like multiple, concussive "Stock and awe" campaigns where the price has plummeted by $600 per coin. Everytime that happens, the subreddit for /r/bitcoin posts the national suicide hotline and the price rallies in 4 months.

fullshark 9y ago

I think they will plummet because the main driver of interest is speculation at the moment.

deleted 9y ago

[deleted]

jondubois 9y ago

Bitcoin didn't exist during the first recession, but other virtual currencies did such as Linden Dollars in Second Life. Apparently the Linden dollar crashed not long before the 2008 financial crisis hit - A virtual bank in SL went bankrupt because of a virtual 'run on the banks'. I think the same might happen with crypto-currencies but they'll bounce back.

ojr 9y ago

seeing that Koreans is the majority of the crypto market cap not Americans and South Korea was one of the few countries that was not in a recession in 2008, I am not sure why the price of bitcoin cash will plummet

mathgenius 9y ago

Much of crypto is tied to the tech sector, so i would expect that to go south. But assets like bitcoin might weather the storm better, being more purely "store of value" like gold.

mrep 9y ago

Crash. People will lose their jobs and have to dip into their savings/investment to cover their day to day expenses. Those that have bitcoin will have to sell some to cover their cash expenses thereby flooding the market.

Jordy_Man 9y ago
If (# of bitcoin holders losing jobs) > (# of people wanting to hedge against their Fiat currency): Print(Bitcoin will Crash!) Else: Print(Bitcoin will boom!)

1001101 9y ago

Depends on what happens during the recession. If it's like the last one where we went from >5% fed funds to 0% (we're at 1% right now), and increased the fed's balance sheet to the tune of 4T through QE, and the national debt by 15T, Bitcoin is going to look very, very shiny. If we go negative interest rates, that's going to give Bitcoin a positive carry. I'm dollar hedged right now for this very reason. We'll see what happens. I'm watching China credit impulse and CNY/USD pretty closely, and of course, trying to stay on top of the black swans (eg. N. Korea). I'm not too worried about the US economy - US financial markets, on the other hand, have Trump tax cuts priced in at 30X CAPE, so he needs to deliver on that, or...