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Occasionally I post an interesting question from Quora and my answer. Here's another - what do you think?
Question:
What happens to Bitcoin/Crypto currencies if we go through a global recession in 2018?
Answer:
Depends what kind of recession.
If it’s a normal economic pull back, cryptocurrencies will probably suffer. Maybe not, but I expect people will sell some of their crypto back into their local currency, simply because people will need the money to pay off debts and other expenses that can’t be paid in crypto. Or simply because they would like the certainty of knowing that they have the cash in hand.
If it’s a financial crisis, cryptocurrencies will probably see a big spike up. Wealthy, financially connected, and well-informed people will recognize the situation and they will move their money into an asset that cannot be diluted and inflated into oblivion, as happens with every financial crisis. Then poor, middle class, and ignorant people will see the price go up quickly, think this is a way to get rich while everybody else is getting poorer, and plow in with whatever means they have.
I sincerely hope we will not have to find out.
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Your comments?