Can crypto be an alternative at the time of overall financial recession?
Recently the U.S. bank JPMorgan Chase calculated the chance of an outbreak of a new financial crisis. The result of this calculation was a chance of 60% around 2020 and even a higher chance of 80% at the time of 2021. This research was conducted for the U.S. economy but of course it is a well-known fact that the welfare and well-being of the U.S. economy has enormous influence on the rest of the world. JPMorgan reported to Bloomberg the following: “The probability of a U.S. recession inside one year is right around 28 percent, and rises to more than 60 percent over the next two years, researchers wrote in a note this week. Over the next three years, the odds are higher than 80 percent, as indicated by the note.”
The whole world will forever remember the date on which the most famous crypto coin the Bitcoin was born, namely in 2009, just after the peak of the previous (Western) global financial crisis. One of the ideals of the ‘ Bitcoin project ‘ is to offer an alternative at the time of financial crisis. Fundamentality, this is of course certainly so, Bitcoin is naturally deflationary, while fiat money (especially in times of crisis) more often show signs of inflation.
What would be Bitcoin`s and the whole crypto market`s reaction if a crisis really broke out? That is, of course, the ‘ million-dollar question ‘. At the end of last year, the opinion of most of the people would have been that crypto are a perfect alternative for the euro/dollar/yen/pound. Although, by the end of 2018 that trend will be a bit more nuanced. Mainly most investors are not investing huge sums in crypto, for them it is or a very interesting investment or a HODL-story. The crowd invested in crypto and most people will only start looking on the longer term, at the effect of their investment.