Home » Reasons to Buy Bitcoin During Economic Turmoil
There is a lot of nervous crypto money on the sidelines right now, waiting for the White House to announce a recession. You can also have a Bitcoin investment by visiting Bitcoin Loophole.
However, guess what? Scary money does not make money. People exaggerate Bitcoin (BTC -1.27%) recession fears. If we enter a recession, Bitcoin will be the first thing I buy because it still appears to me to be the best long-term store of value and the single best way to protect my financial future.
However, we are in uncharted territory here. No one knows how Bitcoin will perform during a long-term recession because the cryptocurrency has never experienced one. Remember, Bitcoin only emerged in 2009, in the aftermath of the previous economic downturn of 2007-09. That could explain much of the current market FUD (Fear, Uncertainty, and Doubt). Here are three compelling reasons to buy Bitcoin during a recession.
Bitcoin Continues to Be a Haven for Cryptocurrency Investors
Investment 101: During an economic downturn, you invest in safe-haven assets. In the stock market, this means investing in recession-resistant stocks, such as utilities, healthcare companies, or consumer staples. After all, even if economic activity slows, your neighbor loses their job, and companies go bankrupt, you can be confident that companies producing consumer goods or charging you for electricity will make money.
Apply similar logic to the cryptocurrency market. People will abandon risky, volatile cryptocurrencies in favor of crypto names they recognize. And right now, Bitcoin is the most well-known and trusted name in the world. Even if people sell a large portion of their crypto holdings to generate cash, they will not get rid of their Bitcoin holdings. If there is one cryptocurrency that people “HODL” for the long term, it is Bitcoin.
On a Global Scale, BTC is Massively Diverse
When people discuss an economic recession, they primarily refer to one in the United States, focusing on the American economy, the Federal Reserve, and the full faith and credit of the United States Treasury. They’re probably also thinking about gas prices, employment figures, and economic data in the United States. However, viewing Bitcoin through the lens of the United States is myopic.
Bitcoin is a genuinely global cryptocurrency that any third-party intermediary does not control. Someone in New York City can buy Bitcoin just as quickly as in Nigeria. As a result, holding Bitcoin is a bet on the fate of the entire global economy, not just the United States.
Yes, the United States may be down for a few quarters, but there is plenty of economic activity elsewhere in the world. Bitcoin can only fail if the world as a whole collapses due to a massive, apocalyptic economic collapse.
BTC was founded after the financial crisis and has proven its tenacity for over a decade. Even during a global pandemic, when stores and businesses closed, Bitcoin’s value increased. Giving people stimulus checks and forcing them to stay home all day created an entirely new cryptocurrency investing class. People who said they’d never return to their old jobs after realizing they could make money and enjoy more free time by investing in cryptocurrency.
What distinguishes Bitcoin is that it is decentralized and largely independent of any single individual or organization. Satoshi Nakamoto, the pseudonymous Bitcoin founder, was a unique genius in recognizing the problem of allowing narrow-minded bureaucrats or politicians to control your economic destiny. That gives people hope that Bitcoin’s value will rise during a recession. Many are stockpiling BTC and hanging on for their dear life.