Bitcoin was created after the 2008 financial crisis as a peer to peer network that would be the solution to trust. The so-called trustless network has grown to revolutionize the way many view money.
Another financial crisis may be imminent according to Dr Nouriel Roubin, a professor at New York University’s Stern School of Business. According to him, the next global recession is imminent and this time, government intervention through the printing of more money would not be the solution to the crisis.
Roubini, who is also the head of Roubini Macro Associates said that the current economic slowdown may be heading towards a recession, with issues such as the US-Sino trade war likely to be the eventual trigger. He also mentioned the possibility of a hard Brexit, the Iranian tension and the IMF conflict with Argentina signaling that the global economy may face another meltdown soon.
According to Roubini, who is sometimes referred to as Dr Doom in some quarters,
“When the next recession hits, policymakers will almost certainly pursue some form of central-bank-financed stimulus whether the situation calls for it or not”
He said that the usual approach of governments is to work towards preventing full-scale depression. In some countries such as the UK, policymakers are already calling for helicopter drops which imply printing more money and making it available to the public to help stimulate the economy.
Cryptoinfowatch tried to sample opinion of the crypto community on what the effect of the next global crisis would have on Bitcoin. Darooghe, in a comment at BitcoinTalk stated that:
“I think gold and Bitcoin will rise in the next great depression which is soon, but buying Bitcoins would be better because it has a greater potential than gold for numerous reasons. From year 1999 to 2011 gold price went up 651% while Bitcoin price went up about 8000% after every major correction. However, in every aspect, Bitcoin is most practical than gold. So after a financial crash people will try to find ways to carry on [with] their lives. Bitcoin, and other cryptocurrencies, will keep the economy moving, and more and more people will want to use them…”
Despite the fact there are many investors who would want safer or more secure assets, it is still doubtful if many would see Bitcoin as that safer asset considering that gold has traditionally been seen as a safe net for major economies. Bitcoin also depends on the health of the global economy to thrive so there are still uncertainties associated with a financial crisis of global proportions.