Would Bitcoin (BTC) be a safe haven in case of an economic crisis?

slvbtc

In times of recessions people seek flight to safety.

Read: Kraken is top 10 exchange for the last 3 years which lead us to write our Kraken review.

In terms of only crypto world, bitcoin is the safest coin so altconis would probably crash hard while the escape to bitcoin would happen. However, bitcoin itself is risky asset compared to gold. While many in crypto space label bitcoin as digital god, it is still a luxury not a necessity and it hasn’t yet proven out its safe haven properties.

So, probable initial reaction to recession would be atlcoins crashing and bitcoin falling moderately.

What happens after the initial phase is the interesting part. If it is just a regular recession bitcoin will stay down until the storm passes. But if what we get is anything like ’08 with bank failures and government bail outs, then bitcoin will take off.

Bitcoin is not a hedge against a recession or inflation (yet), thats still golds role. Bitcoin is a hedge against banks. If banks begin to suspend withdrawals or start going bankrupt like in ’08 thats when bitcoin shines.

darkstarman

Read: Is Binance safe and how to use it

jack_artsnacks

The concept of ‘being your own bank’ doesn’t get through to the majority of people; it could take generations/several back-to-back recessions to overturn public trust in banks.

Happy_Pizza_

Another huge question is what happens during and after a recession. What if bitcoin falls massively during a recession and then bubbles immediately afterwards? This is what happened with gold during the last recession. When the great recession first hit, gold initially fell along with stocks. Then, after the recession ended, gold immediately went into a multi-year bubble. This site seems to claim that quantative easing and a bunch of other factors caused the bump in gold prices, and notes that many commodities increased in price at the same time gold did.

So at the beginning of a recession, at least initially, the price of bitcoin will not rise significantly. But during, after, and before a recession, anything can happen.