While it was a bumpy year with its ups and downs, national-level technopolitical arguments, and regulative surprises, there is one sole thing every accredited market expert, international analysts, and central banks agree upon; and that is the fact that another major global-scale financial recession is not only unavoidable at this point, but it is also just around the corner and might hit the markets as soon as next year.
A quick glimpse at the bonds yield curve* indicates that we’re definitely on the right path to, well, a ‘catastrophic economic crisis’ of the likes of the 2008 financial recession, where not just households, and companies shuttered into dust in a matter of hours, but even some of the healthiest market-wise financial institutions and trusted banks ironically enough filed for bankruptcy.
In this article, I’ll try to lay down the basics of what makes a global financial recession to visit the ‘surface’ of the ‘maquillaged economy’, as well as explain why I believe this time, investing in Bitcoin and/or other cryptocurrencies might give us a chance to smile during the and post-crisis.
- 1 How can we be certain a crisis is coming
- 2 Why it happens, can we avoid it?
- 3 Why Bitcoin (and cryptos in general)?
*essentially an index that showcases market confidence. Historical data suggest that the curve was negative every single time we approached a financial recession for the last half-century.
How can we be certain a crisis is coming
For this section, you don’t have to take my word for it, as basically everyone who is supposed to assure us that things are financially stable and blooming has predicted in the last 24 months a global financial crisis will hit the markets anywhere in the immediate future.
In the US, more than 70% of economists surveyed by the National Association for Business Economics said they are positive a recession will strike before the end of 2021, and the stock market didn’t disagree with their statement at that period either.
One of the world’s leading investment banks, JPMorgan was not even half so generous, saying that not only a financial crisis is unavoidable, but it will also hit the markets somewhere in 2020, speculating that it might be sparked by automated trading bots.
Read More: HSBC Plans on ‘Tokenizing’ $20bn Worth of Paper Assets using Blockchain
Elizabeth Warren, and Nouriel Roubini, who would typically require a full article just to unpack their titles, but I’m sure you know how to Google that stuff, are among the academics who previously predicted the financial crisis of 2008.
Wanna guess their stance on the matter? They are both far assured that a financial crisis, most likely even worse than the one in 2008, is indeed developing behind the curtain of ‘financial stability’ and it will hit the markets in the next couple of years.
Finally, and only to wrap this up, the Central Bank of England has a dedicated section on its official website regarding the next financial recession (lol), where they say:
“No one can say where the next crisis will come from. But what we do know is that the next crisis will be different from past crises: history may rhyme, but it rarely repeats.”
Now try to imagine all that worry was absent prior to the 2008 crisis, yet it managed to knee-down even the strongest economies on the globe. I’d say this should make it pretty certain a crisis is on its way.
You can check and monitor countries that have inverted yield curves at World Government Bonds.
Why it happens, can we avoid it?
In a nutshell, for the same reason winter and summer happens, universal financial shifts are in some essence essential for the progression of life itself. I know that this might sound ‘philosophical’, but let me elaborate:
Anything from sound as a physical phenomenon, to the Sun of our solar system, that exist over long periods of time, tend to develop a series of frequencies over which attributes of the respective system subject to the example are expressed naturally or by force.
Even simpler, a human heart has its ups and downs, and it should be only considered natural, as the available alternatives are implying imminent death or extreme arrhythmia. Can you imagine a heartbeat frequency that’s flat or logarithmic towards one direction? That’s what I thought.
Back to the point, financial ‘summers or winters’, and even broader universal ‘wellbeing or depression’ is a natural thing, that is more of a cosmic domino effect rather than ‘bank manipulation’ or human greed. It’s natural.
It would be silly to assume humans have the power to influence cosmic events, and if anything the best we can do is to prepare for each period of the frequency we’re focusing on, the same way we prepare for summer or winter.
Read More: German Banks Urge EU to Create a Digital Euro
Summing up, I don’t think we should try to avoid a financial crisis, even if some would argue we could, as it would be equally unpractical, if not stupid, as attempting to avoid winter. Instead, we should prepare for it accordingly. In this case, I’d say find a safe-haven in digital assets. (BOOM!)
Why Bitcoin (and cryptos in general)?
Relax, I wouldn’t let you scratch your heads over the last sentence during your bed-time, although I’ll be brief and laconic on this one.
To start, let’s pretend we don’t have Bitcoin. So, what would be our other options to store our hard-earned fiat currency and/or physical assets without losing their respective value if not making any profit at all?
Let’s be realistic, the last financial crisis started from the housing market, in some cases, it was even referred to as the ‘housing market crisis’.
Investing in housing during a period of crisis means that you will buy physical assets that nobody will have money to purchase. Basically, if you’re not ok with waiting for a couple of decades only to sell that house in the same price you got it for, housing is not an option.
Gold / Oil
I’ll be honest, I really wanna add some gold in my portfolio, but the thing about traditional commodities is that they’re already distributed among top-shelf players. Sure if you’re into gold for some time now, it would make sense to buy more during the dip, but as a new entry, I’d rather pump an altcoin in the 1999th spot.
Gold and Oil are pretty much completely ‘minted’ and there is not much future for new players in the scene. I mean, for me it’s like investing in water. Sure, you can make some cash if you manage to start your own water company with your own mountain and natural spring, but purchasing a 6-pack of AVRA Water won’t make you a successful investor of our times.
Bitcoin, and/or other cryptocurrencies and blossoming digital assets, are the best options for a variety of reasons that will make sense over time, regardless of my present pitch.
The world goes digital, and eventually owning Bitcoin, a cloud company, or land inside a VR city will be worth more than owning physical land, paper money, and certainly oil (lol).
During uncertain times, investors will be looking for a safe-haven, and this is the first time they will have something like Bitcoin to rely upon. Something that can store, and transfer monetary value instantly without carrying tons of gold from one bank to another, without sending your one million crude oil barrels to another country, without looking for a house buyer.
Read More: How Widespread is Bitcoin and Other Cryptos in Late 2019?
If that doesn’t make sense, you’re probably unfamiliar with the internet and not just doubtful about blockchain technology. I hope you’ll enjoy the winter, and be able to sell back whatever it is you’re buying during this global-scale “black-Friday”.