The Stock Market Crash is Coming – Is Bitcoin the Answer?
- JP Morgan recently predicted a 60% likelihood of a significant recession and possible stock market crash in 2020
- Historically, a stock market crash occurs on average every 10-years
- Satoshi Nakamoto created Bitcoin to prevent wealth from being fraudulently seized in the event of a crash, but can Bitcoin stand up to the challenge?
The Next Stock Market Crash is Already Overdue
According to JP Morgan, there is a 28% chance of the U.S. economy entering recession in 2019. This likelihood rises to 60% for the year 2020, and 80% for the year 2021. A stock market crash is, therefore, very likely on the horizon. The only question is, might there be a parallel between the timing of the next stock market crash and the fabled rise of Bitcoin to $1 Million per coin?
Why the Next Stock Market Crash Has to Happen
Talk of pending economic catastrophe often stems from conspiracy theorists. However, alarm calls concerning a recession similar to the great depression of 1929, aren’t being cried by Alex Jones. Instead, JP Morgan and analysts at s Fidelity, Goldman Sachs, and Citigroup, have already started preparing for the next stock market crash.
Budget deficits in the U.S., Europe, and Australasia, have grown significantly year on year since 2008. In many cases, it is, therefore, only a matter of time until debt levels start to match GDP levels and become serviceable. This is not a theory. It is a fact. Moreover, the evidence is in plain sight.
- The average American household currently has less than $1,000 in savings
- Russia, China, and other traditional buyers of U.S. government debt are rapidly relinquishing holdings in favor of gold and natural resources
- House prices and rents are already unsustainable in many parts of the world when compared with local living wages
- Consumer debt has been rising since 2008, in tandem with government debt and annual living costs
At some point, a stock market crash will be triggered. The only question is, when?
Will a Stock Market Crash be a Free Meal Ticket for Bitcoin?
A recession or stock market crash will be catastrophic for the world economy. However, when Satoshi Nakamoto created Bitcoin, he did so to lessen the impact of such a crisis.
Should a stock market crash manifest, it is widely believed that that institutional investment in Bitcoin will skyrocket. This will happen due to Bitcoin being decentralized and impossible for governments to confiscate. However, almost everyone forgets the real reason why Bitcoin will likely flourish during a crisis.
Bitcoin is a Peer to Peer Payment System
During the stock market crash of 1929, runs on banks resulted in millions of people not being able to access cash. In 2008, this almost happened again. However, in 2008 the problem could have been much worse.
If banks were to lose liquidity, ATM cards and credit cards would stop working. Without hard currency, people would be forced to barter and trade for goods. However, even in a worst-case scenario, this can’t happen with Bitcoin.
As well as a store of wealth, Bitcoin is a peer to peer payment system. Should the global financial system collapse overnight, Bitcoin users will still be able to pay with Bitcoin the next day, in place of fiat cash.
Bitcoin Vs. Gold
Mainstream investors understand the need to have a recession-proof store of wealth. This is why traditionally, investors buy gold and silver to insulate themselves from crises. However, gold and silver can’t realistically be used to barter and exchange goods.
- Precious metals can be dangerous to own due to the increased risk of theft
- Gold exchanges are in short supply and will due to high demand, will never exchange precious metals for their fair market value in times of financial upheaval
- When gold exchanges aren’t present, people can’t realistically use gold to purchase inexpensive goods like groceries
It is also worth noting that a lot of gold sold on eBay and even by reputable dealers online, has been found to be gold plated tungsten. Moreover, if you own gold, the likelihood is that you won’t know until you need it.
How Should You Prepare for the Next Stock Market Collapse?
No one knows when the next stock market collapse will hit or what will trigger it. However, it is easy to start preparing to buy Bitcoin.
From a cryptocurrency perspective, anyone with 0.28 BTC will be a member of the Bitcoin 1% when all coins are mined. Moreover, for those who can’t afford Bitcoin (or gold) there are several altcoins like Dash, Litecoin, and DigiByte, which are designed for peer to peer exchange. In fact, lower fees would likely make such coins more preferable to Bitcoin in a real-life crisis scenario.