According to Kyle Chapman; a prominent partner with the technology venture capital firm known as Cosimo Ventures, Bitcoin will survive a recession, but for Ethereum, it will suffer from the recession, while Ripple’s XRP will be unaffected by it all.
Judging from what he wrote in Barron’s, he claims that a recession will not hurt the virtual currency because it is decentralized. Also, bitcoin is independent of the cyclical fluctuation of stock markets.
No Recession In 2019
For Jerome Powell; the Federal Reserve Chairman, he believes that no Recession will occur in the United States anytime soon. Some other economists such as Allianz Mohammed El-Erian also holds the same belief.
Powell claims that the Outlook of the economy is actually favorable plus it is full of positive happenings. For him, an increase will be much slower in 2019 than that of 2018.
2018 had the highest increase the US had ever experienced ever since the monetary crisis. And so, Jerome feels he is right that the increase in the economy will remain positive and be at a stable rate.
Bitcoin: A Safe Haven Like Gold
Pertaining to the virtual currency market, Kyle Chapman has stated that Bitcoin cryptocurrency will likely be a safe haven digital asset and its price will rise in the face of an economic recession.
When faced with a recession, Bitcoin will take on the role of a safe commodity and not equity. This is because of its decentralization and scarcity. For Chapman, by design, Bitcoin was built to be utilized as a foundation for developers to create either an enterprise or a platform.
The supply of Bitcoin is not managed by a single person or body. And so, Bitcoin will most probably operate independently of wider market pressures. It can prospectively Inc in value and require other types of value storages.
Ethereum And Stock Market Trends
For the Ethereum Cryptocurrency, Chapman says it will not perform so well in the course of a recession due to the fact that it is closely linked with equity markets when compared to other virtual currencies.
For Chapman, Ethereum is mainly a developer focused Blockchain platform, and it highly relies on the companies that utilize the platform to create their projects.
So, if those companies were to shut down, the relevance of Ethereum and its price will be affected greatly.
Meanwhile, Ripple is said to remain hugely unhinged if a recession were to occur. This because it operates more as a means of exchange that functions independent of the stock market, unlike Ethereum.
However, the price of XRP will greatly depend on distribution and acceptance. If Ripple were to lose their use to other projects, the coin would lose its value also.
To Wrap It Up
Generally, Chapman claims that he is not aware if a recession might occur, but he believes that the Cryptocurrency asset industry is long overdue for one. He states that it would be good news for the virtual industry. His reason revolves around the recession being a disruptive market that will aid in separating the chaff and wheat.