There has been a lot of talk recently about the possibility of the American economy entering an economic recession, especially after the release of the latest economic data, as a state of panic and fear spread among investors and many sold their holdings, whether stocks or #العملات_الرقمية and kept the cash.
We don’t know when or in what form the next recession will come. But we do know that there are different ways to prepare than in the past. The old tried and true way to weather a recession is with cash and high-quality dividend stocks with strong balance sheets. That remains a great option — but investing in Bitcoin is emerging as an alternative. That’s why Bitcoin, the world’s best asset of the past decade, has also been one of the best ways to weather a recession.
Now let's get into the reasons why you should invest in Bitcoin during a recession.
Bitcoin was created to avoid inflation and overcome recession.
Bitcoin was formed in the crucible of the Great Recession in the United States. In response to the widespread failure of the traditional financial system, Bitcoin’s anonymous founder aimed to create a currency that people could trust and that would operate without third-party interference. He succeeded in creating a non-fungible store of value independent of any sovereign nation, see at what price it launched and see its price today.
It is diverse in nature.
Bitcoin is inherently diverse because it is not subject to the profit or loss of a single economy. It represents unlimited wealth, the US dollar in China is the same as the US dollar in France. But it is still the official currency of the United States, which means it comes with all the pros and cons of the American economy. Furthermore, it can be difficult to obtain, store, and use in any way other than cash in many countries.
Recessions can spread across countries with common economic interests. Although the United States, the European Union, Japan, and many other developed countries experienced recessions in 2008, some developing countries fared well and weathered the recession.
Bitcoin is not subject to specific governments and is not affected by specific economies. It is cross-border and transcends differences. They always fought it in the beginning and there were several restrictions on it. Despite that, every period it achieves record numbers, and many institutions and organizations adopt it.
It is a secure, globally transferable store of wealth.
Bitcoin’s value comes from its scarcity, security, and transferability. Like gold, Bitcoin has typical commodity properties, meaning it has value regardless of how the economy is performing. Unlike stocks, the uptrend is not a direct result of strong favorable earnings in the sector, technological advantages, innovation, financial discipline, or a great management team. Rather, it has value in both economic expansions and contractions.
While it’s true that Ethereum (CRYPTO: ETH) has more practical applications than Bitcoin, and perhaps more upside, Bitcoin is better positioned to perform during a downturn. Its purpose isn’t centered around the growth of smart contracts, non-fungible tokens, or other practical use cases for blockchain technology. Bitcoin’s purpose is as a store of value.
Total supply is fixed, and additional supply is decreasing.
Bitcoin gains a great deal of credibility from the fact that its algorithm has stood the test of time. Since its inception in 2008, the Bitcoin protocol has constantly regulated the supply by ensuring that the rate of Bitcoin mining remains constant, and the additional supply for each block mined decreases over time. There is no printing of Bitcoins by whim or economic need; Bitcoin is limited in number.
It is out of the control of central banks.
It is known that Bitcoin is decentralized, meaning that it is not subject to the control of governments or central banks. It cannot be printed in a number like the dollar or others, and it cannot be manipulated through financial policies, and therefore it is far from inflation or recession.
Bitcoin was created to last forever.
If we compare the characteristics of Bitcoin with those of other fiat currencies and cryptocurrencies, it is clear to see that Bitcoin is specifically designed to be an asset worth owning during a recession. However, there is a high probability that Bitcoin will underperform Ethereum in the long run, as well as many other bullish altcoins.
However, for people who are just starting out in cryptocurrency, Bitcoin remains a good option for beginners to get a chance to get in the game with less risk.
Unlike the dollar and traditional paper money, it may disappear over time as an alternative emerges in a digital world.
Here it becomes clear to us that Bitcoin remains an asset with a value similar to gold and perhaps better. Bitcoin’s performance over the past 10 years proves that it is the best ever and has achieved returns that no other safe haven has achieved, and it has been able to safely overcome periods of recession.