Bitcoin vs 2020 Financial Crisis Meltdown: How Crypto Will Benefit the World During Economic Troubles


What Can We Expect From Bitcoin During the Next Financial Crisis?

There are several experts that believe that the next economic crisis in the world would happen in the coming years (2019-2021). But which will be the role that cryptocurrencies and Bitcoin itself will play during such times?

An Upcoming Crisis?

In the near future, the world may face a new crisis, similar to the one lived back in 2008/9. Economists such as Nouriel Roubini think that by 2020 the a financial crisis would ultimately create recession all over the world.

Some of the issues that specialists take into account are related to unsustainable policies, inflation, trade wars, and slower growth.

Additionally, Gordon Brown, former UK Prime Minister said that we are moving into a future crisis. According to him, the world would be involved in a ‘blame-sharing exercise rather than solving the problem.’

JP Morgan Chase has also given its opinion about the future crisis. They said that US Stock would slide over 20% and that emerging currencies would also fall over 15%.

About it, JP Morgan Mentioned:

“The recession’s duration is a powerful drag on returns, which should dovetail with some readers’ concerns that policymakers lack the necessary monetary and fiscal space to extract economies from the next recession.”

Can Bitcoin Make A Difference?

Bitcoin appeared in the market just after the crisis that hit the world in 2008. Indeed, it was mentioned for the first time two months after the fall of the investment bank Lehman Brothers.

Since that moment, Bitcoin has been expanding all over the world and reaching new communities. It has been growing as an asset to hedge against possible crisis, even when there is no negative correlation between market crashes and Bitcoin price.

In general, during crashes, silver and gold work as the preferred hedge against the crisis. However, people has new options this time, Bitcoin and other cryptocurrencies. This famous virtual currency has been embraced mostly by millennials and younger generations. Older generations may still be sticked to physical gold and other assets.

In the last months, several traditional financial companies have announced new cryptocurrency investments. Some of the firms are Morgan Stanley, Merrill Lynch, Goldman Sachs or JP Morgan. This shows that there is a clear interest from institutional and wealthy investors in Bitcoin and other cryptocurrencies.

At the same time, Kim Dotcom, decided to share his opinion on the matter. He said that the US economy and US dollar would collapse due to the US debt burden. He then said that the crisis could happen in the next two years.

 

Additionally, Anthony Pompliano, founder and partner at Morgan Creek Digital, said that institutions would come under pressure in the next five years if they don’t have exposure to cryptocurrencies and Bitcoin.

It would be very important to see which would be the effect a crisis would have in cryptocurrencies. During 2018, several emerging countries experienced difficult economic problems, we are talking about Argentina, Turkey, Venezuela and South Africa. Although there was an increased demand for Bitcoin from this countries, they were not able to influence the prices of the most important virtual currencies.

Nonetheless, we haven’t experience any major crisis since 2009 to understand how Bitcoin would react to it.

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