What Will Happen to Bitcoin in a Recession? Take a Look at Hong Kong!
|Slavomír Kaňuk|1364x
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What Will Happen to Bitcoin in a Recession? Take a Look at Hong Kong!

The possibility of a recession drawing near is almost a daily topic. Many specialists monitoring various charts and the geopolitical and economic situation believe a crisis is bound to happen soon. They refer e.g. to yield curve inversion, pumping funds into financial systems all over the world, the threat of trade war between the U.S. and China, Brexit and the unceasing conflicts in Hong Kong. With so much uncertainty and the threat of a coming crisis, the question arises how Bitcoin will react the moment another recession breaks out.

Can Hong Kong point to the future of Bitcoin?

The locals worry mainly about the political unrest that has been going on in Hong Kong for quite some time now. And not only in the field of politics and security but also from the financial aspect. People can feel the uncertainty and instability of the financial system, so they are turning to alternatives. One of them is Bitcoin.

The volume of Bitcoin trades in this region reached an all-time high after ATMs in Hong Kong ran out of cash. It is this situation that causes panic in the streets of Hong Kong and forces people to protect their assets in other ways, and BTC is their major haven. Its major advantages are its availability and the speed at which people can get hold of Bitcoin. This makes people turn to the largest cryptocurrency.

Bitcoin may shine in a crisis!

Of course, nobody can predict future but, as the situation shows in Hong Kong, Bitcoin serves as a safe haven in the event of a financial crisis. Probably it isn't any chance that the volume on LocalBitcoins in HKD (the Hong Kong dollar) reached an all-time high in its history at a time of political and financial uncertainty in Hong Kong.

The same situation can be seen in Venezuela where Bitcoin has been a popular investment tool for some time now due to the bad financial situation and hyperinflation in the country. From a certain aspect, BTC can be viewed as a hedge against financial uncertainty and chaos. That is why we may expect that demand for Bitcoin (and, consequently, its price) might skyrocket at a time of financial stagnation, recession or financial crisis.


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