This Crisis Is Good For Bitcoin, But Beware of Recession

[CebuBitcoin]

The current global crisis is good for crypto as it shows the dysfunctionality of the existing system, according to Marcus Swanepoel, co-founder and CEO of crypto exchange Luno. However, in case of a global recession, this nascent industry might be hit hard too, he warned.

Crypto was born out of a financial crisis, accompanied with a vision to upgrade the world to the better financial system, so "the more dysfunctional the existing system becomes, the more there's an opportunity to showcase to the world that there is a better way to do it," Swanepoel told Cryptonews.com. Based on the available data, one can speculate, however, where the current situation can lead, he added.

People were expecting bitcoin (BTC) to rise immediately when the traditional market started falling, yet it dropped. That's not strange, explained the CEO. BTC is a proxy for gold, and what happens in a financial crisis is that a lot of assets go down at the same time, including gold. It follows the market "for a little bit," and "once people have basically removed all the money, put a lot more low-risk assets, and they start reallocating, and then they go into gold and then gold decouples." But Swanepoel said that it's too early to make an assessment on just how correlated BTC is to other asset classes.

https://cryptonews.com/exclusives/this-crisis-is-good-for-bitcoin-but-beware-of-recession-luno-6159.htm

[Leonardo]

At some point, recession is more dangerous than inflation. That's why governments around the world simultaneously announced stumulus packages. The logic here is quite simple. If people don't have money, they wouldn't buy anything, including bitcoin.

But Swanepoel said that it's too early to make an assessment on just how correlated BTC is to other asset classes.

That's a good point, anyway. We can't use normal logic to explain or predict bitcoin.