Fear of Another Global Recession Suggests Cryptocurrencies Are a Safer Bet Than Fiat Currencies

The global recession of 2008 was the scariest dream of the world economy when bankers became poppers within a matter of hours, and the entire market collapsed. After more than a decade, the shocks of recession are still felt in some sectors, and therefore, the thought of another one sends chills down the spine of investors.

Current Economic Scenario

Economists worldwide have stated that there’s a global economic slowdown, where major markets like the US, China, India, the UK, etc. have shown reduced growth in the last couple of quarters. Additionally, political conflicts like the Sino-US trade war, and the Brexit fallout, have further increased tension, as the negative impacts have become more than apparent, with various sectors, like FMCG, Automobile, Agriculture, etc., which have registered negative growths.

This has resulted in a severe impact on Stock Markets, right from Wall Street to Dalal Street. In India alone, more than 1400 stocks registered their 52 week low in August, and over 85% of the companies with less than $150 million cap lost 50% value from their all-time peaks. This has shooed investors away from the market, which is further adding to the slump.

Crypto Moving In Contrast of Expectations

It was always touted that cryptocurrencies would be a protection from the loss of wealth during recessions and slowdowns, but whether these expectations have stayed true is a question we have limited answers at the moment. However, on the face of the matter, it looks like decentralized currencies have also been severely impacted because of the growing economic slowdown, with the apex cryptocurrency, Bitcoin dropping from $20,000 peak in December 2017 to just over $3,500 in January 2019.

What’s interesting, though, is the rise of BTC between February and August this year, where the token’s value increased by more than three times to $13,500. This recovery came at a point when other investment assets except for gold, like bonds and equity, kept declining….

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