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Bitcoin Came Out of the 2008 Financial Crash
What would happen in the event of a financial crash occurring if the stock market collapsed or if the housing bubble finally pops? What would happen to the price of cryptocurrencies? Would they shoot up or would they crash down?
I guess the first thing that I want to say is that I've had a change of heart around this issue as of late.
I thought that with the value of stocks and property and traditional investments crashing everywhere, I thought that many people both poor, average or rich were all flock into the crypto space as a way of investing in something that can't be controlled or manipulated by the government and the banks.
So where the crypto currency like Bitcoin because it has that store a value aspect about it and is only 21 Million of them.
I thought the place of that would skyrocket I thought people would flock into it. There'd be a frenzy!
People would try and buy whatever and so if the prices while like $2300 now, I thought the price could shoot up to $5000 maybe even $10000 or more. With all of the money circulating around the world, who knows!
The sky would have been the limit.
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I thought the situation would have been quite different for kind of pro-business currencies like Riffle and Etherium.
Ripple for obvious reasons. If the banks are collapsing, Who would want to own the internal currency that's used for banks?
And then the reason I thought something like Etherium would struggle is because for the most part for the companies and the Enterprises Theorem Alliance that experiment with Etherium, for the most part is treated as very experimental, very risky. It'd be messed around with in the kind of R&D research and development budget for these large companies and when times get tough and money is hard to come by, when you're looking at their kind of balance sheets what's costing them what and where, knowing that they're not going to want to face a backlash by offloading a bunch of the kind of regular jobs at the public interacts with big and a target something like this instead which doesn't really generate any revenue for the short term.
I feel like Etherium funding, Etherium experimentation would be the one of the first things that they'd cut off.
As I said my feelings around this have changed and I think the main thing that prompted that change of heart was watching one of Andreas Antonopoulos’s videos. He addressed this very issue from his perspective, what he thought would happen and he referenced what he has seen occur in places like I think was Venezuela in Greece, but Greece in particular.
And he spoke about the fact that when these kind of crashes occur and when fear sets in throughout an entire economy, there's a real liquidity crisis and people struggle to get hold of cash.
What happened in Greece is that the banks limited how much money the Greek people can access every single week or month or whatever it was, So people would pay in, you know, they would get their wages from their employer and they'd struggle to actually get hold of that because they, just you know, the banks haven't got the cash to be giving to these people and so in that scenario and a place when people are struggling just to get hold of the money that they need for food, drink ,you know just kind of absolute basic stuff, they're not going to be putting their money and sitting to Bitcoin or any other cryptocurrency at least in the very short term.
In fact would probably be quite the opposite. Because cash will be so hard to come by if there are people who are sitting on Bitcoin and Etherium, quite high value coins.
Unfortunately when push comes to shove, if you have to choose between feeding your child or holding on to your cryptocurrencies as an investment, you're going to choose selling the cryptos, aren’t you?
So I actually think in the event of a major crash, it would actually be terrible for all cryptocurrencies across the board, in the short term. People won't be flocking to buy crypto, to buy Bitcoin especially they’re probably the complete opposite it will actually be people desperate to sell to get whatever cash they can get hold of in order to buy whatever essentials they need.
But there is a huge huge “But” in it.
There is a huge caveat and ask that only applies in the short term. In the long term, I think it would be the best thing to ever, ever happen to crypto currencies.
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It'll be the great moment for any public anywhere. It will be the great legitimizer for cryptocurrencies.
When people can point to the next crash which is going to be horrendous, it's going to be worse than 2008. If people thought 2008 was bad, jjust wait to see what's coming next. They'll point to this, they'll say “Look what your central banks did, look at what the government did, look at all these kind of reckless investment banks did with people's money.”
Look at what they did and recognize that there is an alternative, there is a way of having a functioning economy, of having a monetary system that isn't dependent on the manipulation by these very large powerful bodies whose interest underlined with yours.
And so long as these currencies can gather act together, you know if these currencies like Bitcoin can solve whatever scalability issues that they need to address in order to get that mainstream mass adoption and they'll be good to go.
And I think average joe, when they really do get screwed over by this next crash, they'll be more than willing to finally put their money into this stuff that they've known about for the longest time.
They've known that people have used it to buy online drugs and that kind of stuff.
But they're going to recognize, you know what, “I've been screwed over time and time again with this Fiat monetary system, let's try something else, let's go with something new.”
I don't necessarily think that Bitcoin or Litecoin is going to completely replace fiat currencies anytime soon but it'll be a nice complement, will be a nice alternative option that people can can use when they buy their shopping.
So I think the future of those kind of store value decentralized coins will do well and eventually the very pro-business coins like Ethereum will recover as well.
And so to summarize what I've said in this post, to cut a long story short, I think in the short term, it's going to be terrible for all cryptocurrencies including Bitcoin. But in the long term, it's going to legitimize the very reason that cryptocurrencies were brought into existence in the first place.
People are going to recognize and accept that there is a valid alternative and again, so long as it can actually meet those demands, as long as it can become scalable, accessible, not too expensive then it will be good to go.
Bitcoin as a Safe Haven in an Economic Storm
It really could be the beginning of mass adoption across the world. In terms of practical advice you can take from this post, I would say that, if all of the cryptocurrencies completely tumble in price, DON’T see that!
Don’t perceive that as showing “Oh well, guess there is no future for cryptocurrencies”
Consider it the complete opposite and use that as a chance to buy as much cryptocurrency as you can possibly get hold of, for the times when the economy recovers and people want to flock into this safe space once they've got their necessities covered.
That’s me done for this post.
I welcome any and all thoughts opinions from whoever to agree me to disagree me why, why not? Let me know down below
Follow if you haven't already and I'll be back with another great post very soon! Peace!