How Will Bitcoin Do in a Recession


– I don’t often do this, but I am going to ask you guys
for some help with something. I generally have a pretty strong opinion about the way things are going
to go and how things interact and force other things to
perform in a certain way, what’s gonna help stocks,
what’s not going to. My question, though, and what I’m trying to
develop is an understanding of how are cryptocurrencies going perform during a recession or a
stock market meltdown. (whooshing) (coins clanging) (banging) I have some strong opinions, and I’m developing them
right now as we speak, but I want to hear from you guys. What do you think is gonna
happen during a recession, a very serious recession
versus a mild recession to a stock market correction
of five or 10% compared to 20 or 40%? What happens to cryptocurrencies? Part of the problem is
that they are so new, so we don’t have a really
long track record to see what happened in previous
historical times, but there’s two different
sides of this argument, and some people say one thing. Others say another, and everything I’m looking at has just actually been
making me more confused. The manufacturing index as provided by the Institute for Supply Management and the St. Louis fed, and you can see, I just did a shorter chart
that’s gonna cover the recession, which we had in 2008, which followed on a 2006,
2007 mortgage meltdown crisis, and manufacturing dropped,
which doesn’t matter. I’m just trying to get a close-up chart, and this is one of the
charts I was just looking at with some analysis, so
this is one you get. Anyways, this is just to show
you when the recession began, and obviously, the ISM Manufacturing index
declined significantly and then rebounded. Now, this is a short window of time, and this is part of the problem because I’ll go over here to the
chart provided by CoinDesk, which is gonna show you the
same time period approximately that Bitcoin increased from,
you know, $13, $10 back here, but if you want to start looking at about when the recession
was and how it was too new of an asset vehicle to really
show you anything significant, there’s no track record here. You don’t know how Bitcoin
is definitely going to react to a recession or stock market crash. You can have your opinions, just as I do. It’s supposed to be to a
certain degree a store of value, but it’s also operating and
trading on different influences than we’re typically accustomed to when it comes to the stock
market and recessions and the economy and everything else like that. So the recession began in 2007, very late, but we’ll call it 2008 up
until 2009 a little bit, so what happen in 2008, 2009? Well, that was before
this chart even began, so it’s meaningless. It’s irrelevant. You can’t use historical
data to figure out anything about how Bitcoin performs
during our recession, and you can see what happened was that the cryptocurrency just
basically performed very well except for dropping down from
here for a little while and in more recent times has
soared as high as $2851. This may be even more
significant and more powerful than anything that happens
with the stock market, and that’s a benefit to Bitcoin and Bitcoin investors and cryptocurrencies. Maybe that’s the way it’s gonna play out. I don’t know because during a
recession people are holding onto their cash a little bit harder, and they’re not looking
to invest in greed as much as they look to avoid fear, and if you’re looking to avoid fear, a lot of people are
not going into Bitcoin, although there are some who
are going into cryptocurrencies because of that fear, and
I want to get a better idea of how this is all gonna play
out when we have a bit longer of a track record here. Bitcoin has been around
a little bit longer, and people understand it, and they’re buying it more regularly. I need to know then what happens when the economy starts
going the wrong way. Do cryptocurrencies get stronger, or do they lose some of that
steam when people pull back and try to save up for other things, like having money to buy their groceries. Let me know what you think. What do you think happens to
cryptocurrencies like Ethereum and Bitcoin during something
like a stock market correction or a major recession. What would be really great
if you guys subscribed to the channel because we’re
growing really strongly. We’ve recently busted 10,000 subscribers, and we’re on our way to 100,000, and we need your help to do that. Please tell everybody that you know in the entire world to
subscribe to this channel, and we’ll see how fast
we can get up to 11,111.

43 thoughts on “How Will Bitcoin Do in a Recession”

  1. there was a video with a guy who was with a firm over a 100 years old he said they saw a recession maybe 2018-2019 but doomsday by 2030 . when the shoe shine boy is giving out bit coin tips get out the pyramid is full and there no more investors joe kennedy got out before the great depression due to a shoe shine boy giving stock tips so when anybody in entry level employment is doing this get out . always buy everything on sale when its at a premium walk away country after country is teetering on failure states in America are in trouble pensions are under funded . I'm seeing more cars broke down on side of the interstate also seeing more blacked out billboards something eery is up . wendys has a frosty for 50 cents I think bit coin is a bubble tangiable assets are a must and assets positioned for the downturn

  2. Crypto currency is a bubble right now. No barriers to entry and new ones made everyday. It can't and won't replace gold because it holds no intrinsic value. With the recession I believe we will see money come out of the crypto currencies.

  3. I've been trading crypto for the past week. But what I think will happen is that after this bitcoin correction there will be a recession and that will make bitcoin and other cryptos even STRONGER because of the decentralization. Banks will get bailed people will loose money so people won't trust banks anymore so their next option would be crypto currency, plus people will soon find out that it is a peer to peer system no middleman needed which means cheeper transaction fees (very very cheap), better security, and less fraud. Plus trading a crypto currency is a lot cheaper commissions are below half a cent. I will be looking for crypto currencies that emphasis something like virtual crypto banking to make people familiar with the matter and make a convenient transaction toward the new system. Plus more businesses are already adopting bitcoin as payments which will soon lead to growth in the crypto space and on top of that people will realize how flexible it is for exchanging.

  4. You have to think about a catalyst that will actually affect crypto currencies after a recession. If a war happens will that not be a major affect on the currency of each country? If so that might be an opening to invest into cryptos. I assume during a recession with the same variables as the last one would have a negative affect on crypto currency.

  5. if cryptocurrency (those that only act as stores of value) were stable in their technology then I believe they will perform as precious metals. going up as inflation devalues local fiat currency, or more currency controls put into place.

    right now, it's too speculative to call. it's not a stable market, bitcoin going through divisive software update in a few weeks that no one is able to determine the outcome. like metals, the market is much smaller than people would think, that it only takes a few wealthy institutions to decide it's a decent hedge and the value will climb higher. Keep in mind that the whole market has been swinging between 80-110 billion in the past month, few months ago only around 40-60 billion. a few million dollars buying something like BTC or ETH in one exchange will jack up the price by 50-100 per coin because the market is as liquid as penny stocks, as each exchange only holds a certain percentage of the total coins available.

  6. In a recession the Reserve Bank undertakes QE (print money) that increases supply.

    Bitcoin and Ether are supposedly limited supply, and naturally deflationary.

    So in that theory it could go up.

    i would also say alot of the Alternative coins (alot built off etherium) may suffer because they are not created as a form of currency but a funding mechanism or replacement for penny stocks.

  7. I think people will start flocking towards cryptocurrencies very soon as a safe haven, while the USD slowly collapses. Cryptocurrencies will truely start gaining attention once the recession hits us.

  8. bitcoin in my opinion is in a bubble… may go up a bit further but will fall dramatically. now let's talk marujiuna stocks. Pete what's your take on HEMP

  9. I would assume if there is recession, that Crypto-currencies will suffer just like the rest of the economy. And if they do, I will be buying more.

  10. I agree that there is no way to know for sure, but I believe that cryptocurrencies will not perform well during a recession, if we are talking about a recession that will happen within the next year or two. Bitcoin (particularly the trends in its value) is a lot more complicated than many people think. In my opinion, it is much harder to predict cryptocurrency prices than the majority of stocks' prices, in part because cryptocurrencies are relatively new (huge shifts in BTC price when a population enters or exits the market). I believe that there is too much uncertainty with cryptocurrencies, and people will stay away from them during a recession, and hang on to their cash. Another thing is that although bitcoin and ethereum are growing in popularity, their practical use is quite limited at this stage. Maybe in some future recession, cryptocurrencies would perform well; I think it would at least require cryptocurrencies becoming more mainstream and being used for actual transactions for goods and services more often. Until that happens, I do not think cryptocurrencies will do well in a recession.

  11. I think there will be a crash in cryptocurrency as well and stabilize at much lower levels and from there creep up to higher levels overtime. Given people will lose trust in the system and look for other alternatives to store wealth.

  12. Peter Can you tell me if bollinger bands work better in a 1 year chart or are they better suited for a 1 day 1 minute type chart. With that, how do you personally use them.

  13. In a very serious recession cryptocurrency and in likelihood Ethereum and not Bitcoin will replace the dollar. Satoshi Nakamoto designed bitcoin to prevent economic meltdowns, but Ethereum contains better technology. I like to look at Bitcoin as being like Ebay or Amazon and Ethereum being more like google. Ethereum is a platform that allows decentralized applications to be designed on it, it also allows smart contracts which can save companies millions of dollars by removing lawyer fees. The only drawback to Ethereum is that both UBS and JPMorgan own a substantial amount of it. We are right now experiencing the end of the fiat system. Nothing is backing it, it is subject to inflation due to overprinting and it is extremely slow. A check has a 17 step verification process that takes 5+ days to clear, a bitcoin transaction takes only a few minutes. Cryptocurrency and block chain technology is faster, and provides more value than our current system, it will also allow 2 billion people who don't have access to banks the ability to trade currency using a phone. Its baked in the cake cryptocurrency and blockchain is the future, unless we use IOTA which uses a slightly different technology called TANGLE which has people creating the ledger validate other transactions as way of eliminating all fees associated with currency transfer.

  14. A big part of what cryptos are used for is crime and crime goes up during bad times so in that sense I think they will go up. I thought about the idea that people wouldn't spend the money on the cryptos if they couldn't pay their bills but most people who invest in cryptos probably have enough money to see them through the tough times.

  15. I don't care what happens to it! I just trade the momentum!! don't hold any positions for more than 15 minutes most of the time.

  16. Its going to be a crisis of FIAT and crisis of Central Banks, so my logic says, Crypto and Metal should do just well as alternatives. But on the other hand there is this : Its logical that CBanks with Governments will go against decentralized nonregulated cryptos, since most of them are cutting Banks out of the Financial system significantly. I think they already have their shares of strongest cryptos bought, to dump them during the recession in case they will rise. Dont forget FED can print money, so maybe they already have invested into the crypto to dump it in case its going to be necessary to show people that crypto is not the answer during the crisis. But this can backfire on them … We will see, I think its good idea to own at least some of them and be mentaly prepared to hold long

  17. Bitcoin will fall together with the Dollar since it is connected to it….You exchange your Bitcoins for dollars, right?

  18. Bitcoin will do poorly during a recession. Het money supply contracts during a recession and people will need fiat. For example if your lose your job and your fiat income, chances are you wil convert your crypto back to fiat. A good indicater is the history of the gold price during resession periods. That also preforms poorly.

  19. So what good is 5000 dollar bitcoin if bread cost 5000 dollars. Pretty expensive bread even if you got in for 2 to 3 hundred a bitcoin.

  20. Just a guess but I feel it will crash briefly like gold and silver then recover fiercely once the dust settles

  21. I actually see it going up. People will still have money to invest and in 2008 anything that was an alternative to stocks and real estate went up. Gold, Silver, Bonds, etc all skyrocketed because people needed to put their money somewhere. I can see cryptocurrencies being anothef safe area. Not only that we are getting closer to a time when you can buy almost anything with Bitcoin that you can buy with the U.S. dollar. So there is little need for fiat money.

  22. I think Bitcoin and other currencies would rise for a number of reasons 1 ) Market Cap is low compared to assets classes, 2) as people loose trust with their Governments , they would be looking for a safe heaven outside their regulated banking system, 3) Bitcoin and other Alt currencies can be send and stored instantly in case of war or panic

  23. Today bitcoin is worth $4555.00. Just an observation, we could have doubled our money since this Youtube was posted. There are also some altcoins out there that are extremely low in price right now that appear to have very good prospects for growth. They are Ripple and Stellar Lumens. Peter I would love to know how their fundamentals would measure up to your analysis.

  24. Hey Peter, try a small almost unrelated experiment. There are atleast 2 social media networks based on blockchain network available: Steemit (blockchain ripoff of reddit) & DTube (blockchain ripoff of Youtube). You can get paid on cryptocurrency if you videos get upvotes and likes. Plus popularity. I have a hunch that the crowd of people may be very different from regular youtubers. Lastly, I am sure that your unparalleled quality of work will speak for itself.

  25. I think people will seek methods to protect their assets. Some will buy precious metals and gems, some property, while others will invest in crytocurrencies.

  26. Great objective open dialogue sir. First off, I am a PMs and Cryptocurrency investor. Second, have we recovered from the recession? Third, I don't know how BTC will do but I sure as hell trust a code that cannot be tampered with over a fiat paper that is literally being printed to oblivion. Forth, is BTC really fiat? It meets all the fundamental criteria of sound money. You may say no intrinsic value, but the technology behind it does provide value. Lastly, the most overlooked aspect of anything that can be considered valuable is CONSENSUS. Is fiat currency valuable? I would say no but as we all know, societies all over the world have come to a consensus that it is.

    I am no expert by the no means but I believe these are questions worthy of looking deeper into. Aloha from Hawaii 🤙🏼

  27. Well we have a few small scale models of what may happen, maybe. I haven't looked into it but has anyone seen what Venezuelan citizens are doing to get out of their financial crisis?

  28. Also at 3:05 you state that you cant gauge how well BTC will react during a recession because it wasn't around yet. I'd like to propose that since BTC was created because of the recession, could we not glean valuable data from that observation? That a recession during this time in human history, with our capabilities at that time, that we were able to create a possible solution to problems caused by that recession? We had to have a polio outbreak before we could invent a polio vaccine, and we did so in an extremely expedient manner in response to a crisis.

  29. In a recession people loose their jobs. They will need to cash out to support their lifestyle. The crypto market will take a hit but it won't be as bad as most think. Most people still don't know anything about crypto currency so most people still aren't investing in the crypto market. Those that are investing in the crypto market hopefully are using their "play" money and not using their 401(k) or retirment money. There is also the possibility that more money will pour into crypto during a recession which will help stabilize the market in the event of a correction/crash. There most likely will be a correction coming but if you are holding for 5-10 years then it shouldn't be much of a concern.

  30. What if the oil market crashes, a food crisis linked to desertification happens, a solar storm destroys all Satalites, how can bitcoin replace oil as the store of value if there us no more internet or food ? 🙉

  31. I like to think of Bitcoin as a improved form of gold. (digital gold if you will) so my thinking is that Bitcoin won't fare as well against gold and silver but should do very well against fiat who's value will become more worthless than it already is. Truth is that this is already going on now even as we speak. Here is why I think so.

    I see the institutional investors knocking down the price of Bitcoin in the futures markets and scalping bitcoin for themselves. At the same time printing fiat in the form of bonds and stock buy backs like they think the end is near, maybe because it is. Big money always take flight to safety and what can be safer than gold. Digital Gold?

  32. i really wish bitcoin would disappear to nothing as it has no intrinsic value.. nobody uses it as a currency.. it's just a gambling machine. It's like a stock that isn't backed/tied to anything of value.
    I'm all for crypto though.. but only crypto that solves problems in our world beyond merely acting as a means of exchange or 'currency'.. because ALL crypto can technically be used like a currency if you wanted. If it's the limited supply, there are cryptos with less supply.. There are even cryptos that burn up and diminish in supply..
    holding a bitcoin does nothing.. it's just air.. bragging rights. Not something you can physically show anyone. anyone could just lie about how much they have if bragging rights is all they cared about.
    So what gives it value then? It's just the name. Because it's an easy to remember name that everyone talks about because it's been around long enough to be remembered.

    But i think it will even lose that in the end.. Because of brand watering down.

    Bitcoin is a term that is starting to become so synonymous with crypto in general that i'm now hearing people call cardano and ether 'bitcoin'. So it's gradually replacing the word "crypto".
    they will say "i'm going to buy some bitcoin" and then they point out the "bitcoin" of interest to them and it's "ethereum" or "nem" or some other alt coin. haha.

    just like how people call all "window cleaner" "windex".

  33. Thank you! Great video! In your opinion is it better to invest in crypto before the crash or just after the crash? I just have a hard time understanding when the crash does happen will it make crypto skyrocket right away or will it drop first before it goes up? Will it make the crypto more valuable or will the crypto assets decline along with the other stock markets and provide a good opportunity for larger crypto investments (with less buying price per coin/token) ?
    Say if the crash was to happen next week, would you sell your crypto now and wait unit it drops a bit more after the crash has taken place and invest again at a low buying price?

  34. Simple! Cryptocurrency relies on fiat cash conversion to spend. In a recession / depression people will pull their rcrypto out for needs. Exchanges will freeze up as the price of crypto declines fast as people lose money that's not regulated. Gold will rise as countries are stockpiling it for wealth preservation. Crypto will be akin to wooden nickels! The government will use blockchain to track everything and make their own FED COIN on the blockchain that is regulated . It will just be a cash substitute. Therefore the Government can rob you any time they deem you owe money like the IRS does now as you will not be able to hold cash that is untraceable. People will find out that cash in hand was a privacy coin that the government could not rob you of too late in life!

  35. The companies that run off crypto will crash therefore a crash in the coin. inversly the coin increases in value during recessions just like gold. I see a jump but not huge

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