We have not seen a recession since Bitcoin came to life. However, especially since the coronavirus-driven stock market crash, BTC proponents hallucinate new all time highs in USD terms.
If you do not get Bitcoin, you do not get Bitcoin’s role in a recession either.
A recession is not good news for Bitcoin, as Bitcoin is meant to be intertwined with general economic activities. If you think of Bitcoin as a non-economic factor—such as BTC does—you would dare to say a recession is Bitcoin positive.
What is a recession? How does it relate to Bitcoin?
Recessions are general slow downs in economic transactions of all kinds. Market participants do not work, buy, sell, speculate, advertise or thrive in recessions as much as in non recessional phases.
It is too early to call it a real recession due to the current coronavirus crisis. So far, we have seen a severe stock market crash, broken supply chains and in many countries crucial lock ups of societal life in general. A recession could easily occur by that, but has not yet.
As Bitcoin is a peer-to-peer electronic cash system as described in the whitepaper, one does not have to be a Nobel Prize winner in economics to grasp that any cash system cannot prosper in a generally slowed down economy.
Let us assume a recession and pay attention to Bitcoin SV first
Even if we slide into a recession, Bitcoin will for many reasons not be a “store of value” or “digital gold” as falsely propagated by BTC proponents.
Bitcoin is transactions. To be more specific: Bitcoin is the ability to write onto a public ledger. This in itself is the utility and therefore value of Bitcoin, nowadays only fulfilled by Bitcoin SV (BSV).
If in a recession, general economic activity (translatable as economic transactions) decreases, Bitcoin’s utility to perform public ledger entries decreases for the time of the recession, too. When less market participants transact economically, less market participants would make use of a public ledger that records transactions.
This is not hard to understand.
However, people are still transacting in recessions. They transact less than before, but they still transact. So even in a recession, Bitcoin SV cannot lose its utility driven value to zero. As long as people actually transact, Bitcoin SV has value.
Also take into consideration that a recession is a market catharsis. Recessions force market participants to reevaluate their strategies and efficiencies. Businesses have no choice other than optimization in recessions. Bitcoin SV offers great opportunities for market participants in general and could be looked into more closely by them in a recession.
BTC in a recession—bye bye
So recessions are not positive news for Bitcoin due to a slow down in transactions. However, there is a digital asset called BTC that does not even claim to be meant for transactions, but a “store of value” or “digital gold” instead.
Bitcoin SV follows the original Bitcoin white paper, while BTC does not. BTC publicly distances itself from the way Bitcoin was meant to be. They do not seek to be a public ledger to be written onto and have any utility at all. In BTC, it is all about finding a greater fool to buy your BTC for a higher USD price.
It was quite a shock moment for BTC proponents to watch BTC’s USD valuation drastically drop together with the stock market some days ago. They have believed the lie of BTC being a “store of value” or “digital gold.” Secretly, BTC proponents did not only want their BTC to “store” its USD price, but actually go higher in a recession or market crash.
They are out there desperately trying to find excuses for why BTC crashed just as much as the stock market. Let me kindly help you there: The stock market has since 2008 been quite a speculative thing, and here comes the joke: BTC is, too. BTC is nothing but speculation.
There is nothing wrong with speculation as long as you speculate on assets that actually have utility. However, BTC has no utility, so why do people expect anything out of it, even in speculative terms?
Recessions are not times of high risk speculations. In recessions, people try to stay safe in actual fiat cash, gold and maybe real estates. They care to keep their jobs, not speculate on whether Elizabeth Stark and Samson Mow manage to complicate Lightning Network even more into oblivion.
This is why your BTC will not save you in a recession: BTC is not about transactions, it is not about utility, it is not about optimizing businesses, customer experiences or governmental infrastructure. People need transactions, utility and optimization in recessions though!
If we get hit by a real recession due to the coronavirus crisis, people will drop BTC faster than you can imagine. We are not talking about 30% price loss here, we talk about BTC going to disappear.
Whether we slide into a recession or not, utility wins
In USD terms, Bitcoin SV and BTC both would lose in a recession. BTC would be—as a speculative asset—be dropped by most speculators for other assets that actually have utility. It can literally drop to zero. Bitcoin SV can not drop to zero as it is already being used by Bitcoin SV driven apps and their user base.
Just a hint: Twetch, a Bitcoin SV driven social media platform, has recently reached 10,000 users. These users will not disappear in a recession. They will still be transacting on Bitcoin SV by using Twetch. This is the beauty of utility: utility is recession proof.
You want to be safe in a recession concerning your digital assets (so called cryptocurrencies)?
Flee into a digital asset that actually has utility. Bitcoin SV offers utility for businesses, customers and governments. It is a scalable public ledger to let literally anyone who has access to a Bitcoin SV coin/token write onto it. This is utility, this is transacting.
By the way: transacting market participants are the only way out of recessions.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.