Erik Voorhees Shares Why Bitcoin (BTC) is the Next Global Recession Exit Valve and Escape Hatch
Many people believe that the global economy is on the verge of collapse. Several credited and established economist back this theory, despite some people affirming that everything is going to be fine and that there is simply nothing to worry about.
In the crypto community, most believe that the upcoming crisis is about to happen.
Now, Erik Voorhees, the CEO of the crypto company ShapeShift, has talked about how Bitcoin can be used as a sort of a escape hatch for this upcoming recession. According to him, when the traditional economy starts to collapse, we will see people start to use Bitcoin in order to protect themselves from the trouble that will be coming.
Will The Recession Actually Happen?
Nobody knows whether a recession will happen before it does. We can see signs, but the event that actually crashes the market and their exact date are unpredictable. What seems to be a solid bet is that we will eventually see a recession.
The main reason for the people who see the recession as near is that despite the fact that the global economy is doing fine, for now, some fiscal and economic indicators are not too good. For instance, the U. S. Treasury bond curve saw a negative spread recently, which also happened before the last three major crisis.
Debt is also rising a lot since the last decade, which is generally understood by economists as something really dangerous. Even after 2008, when the world saw how dangerous it was to keep rising debt, most central banks continue to do it. Some specialists accuse governments of not learning from past mistakes and believe that we may see some recession again.
During the last recession, the debt of the United States was $8 trillion USD, now it is $22 trillion USD, which does not seem to be very sustainable in the long term. The current president is not doing a lot to solve this issue, either.
Several people have drawn parallels between today and the Great Recession of 1929, which can be counted as another ominous sign.
The truth is nobody is actually sure whether this means that a recession is around the corner, but almost everybody knows that one will happen eventually. When? This year? Five years from now? Ten? This is very hard to precise.
Some predictions say that the U. S. will be paying more debts than it receives in taxes by 2022, which may also fuel a recession.
How Can Bitcoin Save Us From The Recession?
When the crisis happens (and it almost certainly will eventually happen), Bitcoin will be here. What does that mean? Venezuela actually gives us a great example at this time. The country is being ravaged by hyperinflation.
As the price of assets drop during the crisis and governments print more money or devaluate their currency to pay their debt, we will possibly see inflation, which will lead people to invest in more stable forms of storing value: Bitcoin.
Bitcoin is non-sovereign, has a hard cap and is impossible to control. It has all the characteristics which may lead people to invest in it during the recession. Basically, Bitcoin will be benefited from inflation that devaluates the U. S. dollar or by any crash in the stocks market.