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Bitcoin is about to ace a full-blown recession period and investors are speculating about its future
Cryptocurrency as an asset class has flourished immensely since its inception. Digital assets are being adopted on a worldwide basis due to the various benefits and advantages that it provides. Cryptocurrencies are also a passive form of income for thousands of individuals in the investment sector. But a lesser-known fact about digital assets is that the domain is quite closely related to inflation and recession. Major cryptocurrencies, especially Bitcoin are considered excellent hedge assets against inflation and that can protect the wealth of the investors who are looking to outgrow adverse economic conditions. Not just inflation or recession, buyers can use cryptocurrencies to outgrow any economic or financial condition. But of all the cryptocurrencies that can be used as a hedge, Bitcoin is the most trustworthy. But there are concerns if BTC will actually, successfully survive this recession period or not. Given that the token is at its most volatile stage right now and its value is constantly declining without any support or resistance, investors and experts are worried about the future prospects of crypto.
With inflation reaching new highs as months pass by, the Federal Reserve has taken a bold move to save the US and global economy from getting exposed to elevated levels of risks. The global markets were hit hard by the recession during the Covid pandemic, but it did have a positive impact on the digital asset market. Bitcoin reached its all-time highs and continued to break its barriers one after the other. But the crypto market is suffering from extreme volatility and uncertainty for the past several months. The Bitcoin price, along with several other cryptocurrencies is constantly plummeting due to the degrading macroeconomic factors and loss in investor appetite to further dedicate their finances to cryptocurrencies.
Will Bitcoin survive its first recession?
Bitcoin was, reportedly, created as a response to the 2008 global recession. It was supposed to stay away from the political, economic, and financial turmoils that go on in the centralized market. The crypto was introduced to create a new way to transact without depending on the trust of third parties, such as banks, in general, failing centralized baking systems that bail out the general public to satiate the needs of the government. But this time, Bitcoin has to face a full-blown recession period, which might be quite scary for BTC investors since the crypto’s value is already rolling down a hill.
According to tech analysts and crypto experts, there are chances that BTC might not totally disintegrate in a recession stage and there are several reasons behind it. Firstly, BTC was built for a situation like this. Since the crypto was created as a response to a recession, it is quite obvious that the crypto is programmed to survive in an environment like that. The failure of the traditional asset markets led to the creation of decentralized assets. They succeeded in creating a non-fungible store of value that is independent of any sovereign government.
Bitcoin has garnered the trust and credibility of thousands of crypto investors. BTC’s supply has been constantly regulated since it ensures the pace of Bitcoin mining. Experts have compared Bitcoin’s attributes to those of fiat currencies and have reached the conclusion that it will continue to dominate the digital world. Bitcoin is quiet unpredictable; hence, it won’t be so easy to declare if the crypto will survive or not, but it is for sure that BTC does have the potential to survive, which makes it a good contender for investment assets in the long run and amid drastic economic conditions.