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1. Don't have any debt 2. Lower your monthly costs as much as possible 3. Save money 4. Although we don't know how cryptocurrencies will fare in a recession
by mtgx 9y ago
1. Don't have any debt
2. Lower your monthly costs as much as possible
3. Save money
4. Although we don't know how cryptocurrencies will fare in a recession (I think it could go either way, if people cash out, for instance, to buy their daily needs), I think it could be safer to hold some money in solid/proven cryptocurrency compared to say a bank. Modern banks, especially U.S. ones are built on quick-sand with their 100-500x leverage for their assets. If something goes wrong for them it will go wrong quickly. And if things are bad enough, the government will even ban people from withdrawing their money from banks.
- aaavl2821 9y agoThe latter is potentially dangerous advice. If you are in the US, the FDIC will insure your savings and there are centuries of regulations in place to prevent bank runs. In other countries I know this can be a real risk. if most people are investing in crypto as a safe haven asset like gold, maybe your advice is good. If people are mostly investing in it to get rich, the advice is probably bad as high risk high return assets will probably get hit the hardest in a recession What's higher: the risk of a run on a bank in the US or the risk of crypto declining 50%+?
- zrail 9y agoUS bank accounts are federally insured by the FDIC or the NCUA. During the GFC hundreds of banks closed and every single account holder was made whole up to the limit of FDIC insurance. There was no cash liquidity issue for ordinary account holders. Trusting cryptocurrency over the FDIC is naive in the extreme.