Reasons for Crypto-Optimism During the Next Recession
Made a list of a few things for crypto holders to be optimistic about the recession/depression about to unfold in the global markets right now.
- Crypto's market cap is less than 1% (possibly even less than 0.1%) of traditional stocks. If the stock market goes down,
- Banks are taking their time raising interest rates on savings accounts while pushing mortgage and loan rates up at the same time. This will make staking rewards (XTZ- 4.6%, ETH - 3.65%) look appealing.
- The 2008 recession coincides with a period where tech companies (Apple, Google, Facebook, Microsoft) took over the charts of the Fortune 500. We're likely to see a similar thing happen again - crypto is the industry most positioned to be in that category right now.
- Ponzi schemes exist in traditional markets too, and we're going to see Bernie Madoff-esque figures emerge as the market starts to dip. Madoff was able to keep his racket going for over 20 years just because the stock market kept on going up and up. When that stops, the scams will too. (Many of these practices have been "legalized" in the finance worlds at this point, but it won't change the fact that people will lose money and there will be a backlash against that.) This will further erode trust in the traditional markets as a whole.
People generally don't do research unless they're forced to, but the economic slowdown may force a lot of people to look further into the details out there. This generally works in favor of crypto assets since what they offer now is just a better deal for most people out there.
- Crypto's market cap is less than 1% (possibly even less than 0.1%) of traditional stocks. If the stock market goes down,
- Banks are taking their time raising interest rates on savings accounts while pushing mortgage and loan rates up at the same time. This will make staking rewards (XTZ- 4.6%, ETH - 3.65%) look appealing.
- The 2008 recession coincides with a period where tech companies (Apple, Google, Facebook, Microsoft) took over the charts of the Fortune 500. We're likely to see a similar thing happen again - crypto is the industry most positioned to be in that category right now.
- Ponzi schemes exist in traditional markets too, and we're going to see Bernie Madoff-esque figures emerge as the market starts to dip. Madoff was able to keep his racket going for over 20 years just because the stock market kept on going up and up. When that stops, the scams will too. (Many of these practices have been "legalized" in the finance worlds at this point, but it won't change the fact that people will lose money and there will be a backlash against that.) This will further erode trust in the traditional markets as a whole.
People generally don't do research unless they're forced to, but the economic slowdown may force a lot of people to look further into the details out there. This generally works in favor of crypto assets since what they offer now is just a better deal for most people out there.
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