03-05-2020, 11:56 PM
Would cryptocurrency become more valuable following a recession?
<!-- SC_OFF --><div class="md"><p>Not that I hope for a recession, but many would say we'll encounter one in the next 5 years. I was thinking. Money holds value relative to other money based on the value assigned to it, <strong>based on the actual productivity and value created by humans to back it</strong>. So when a stock corrects itself, put as simply as possible, investors gave too much value in and received less in return, so they overvalued the company and its future profits. Now, with that as the premise, crypto, although not a stock or bond, has to gather value from somewhere. Instead of the "investor" middle-man, though, it's simply a real-world to human-given value relationship.</p> <p>​</p> <p>All that premise behind, because I have to assume I'm right and don't have anything fundamentally wrong with my understanding of how money works (do I?) before asking this. If a recession is to occur, in any country, then the value created by labor in the country goes down, thus the value of the currency follows and/or inflates. If such a thing were to happen, would the value of crypto go down at about the same rate? Or would the current coin in-circulation still be considered that value because it's not connected to any sort of market? Because in that case, the imaginary value of crypto staying the same in everyone's mind means it's suddenly worth more in a receded environment. Right?</p> </div><!-- SC_ON --> Kind Regards R
<!-- SC_OFF --><div class="md"><p>Not that I hope for a recession, but many would say we'll encounter one in the next 5 years. I was thinking. Money holds value relative to other money based on the value assigned to it, <strong>based on the actual productivity and value created by humans to back it</strong>. So when a stock corrects itself, put as simply as possible, investors gave too much value in and received less in return, so they overvalued the company and its future profits. Now, with that as the premise, crypto, although not a stock or bond, has to gather value from somewhere. Instead of the "investor" middle-man, though, it's simply a real-world to human-given value relationship.</p> <p>​</p> <p>All that premise behind, because I have to assume I'm right and don't have anything fundamentally wrong with my understanding of how money works (do I?) before asking this. If a recession is to occur, in any country, then the value created by labor in the country goes down, thus the value of the currency follows and/or inflates. If such a thing were to happen, would the value of crypto go down at about the same rate? Or would the current coin in-circulation still be considered that value because it's not connected to any sort of market? Because in that case, the imaginary value of crypto staying the same in everyone's mind means it's suddenly worth more in a receded environment. Right?</p> </div><!-- SC_ON --> Kind Regards R