What impact do you think a recession could have on the cryptocurrency market?
What impact do you think a recession could have on the cryptocurrency market?
Cryptocurrency is still relatively new, and we haven’t yet fully seen how it will respond to a recession. On one hand, a recession could be viewed positively if people choose to move their savings—money they don’t need immediately—into crypto as a way to protect their assets from inflation. The weakening of the dollar, for example, could drive up the price of Bitcoin and other cryptocurrencies. On the other hand, we might also see governments imposing stricter regulations on crypto in an effort to boost demand for their own national currencies.
In the short run, many individuals may sell Bitcoin to pay other obligations and make it through the recession. But there are now a lot of institutional investors who have invested in Bitcoin and they won’t sell.