For those old enough to remember the Great Recession that struck the global economy in 2008, we would like to avoid a situation like that again. The economic strife we all felt during those days was enough to put several companies out of business; cause many people to lose their pension plans and their 401Ks and be in debt for most of their lives.
We Really Can’t Afford Another Recession
Now, a financial analyst is warning that the Great Recession – which inspired the creation of bitcoin 11 years ago – could happen all over again if we’re not careful.
The Great Recession is viewed with mostly negative sentiment. This is more than understandable, but we must recall that virtually every situation has a good side and a bad side. The one positive note that we can take from those circumstances is that the economic concerns felt during that time led to the world’s primary cryptocurrency, which recently struck $9,700 after trading in the mid-$7,000 range for quite some time.
Bitcoin has inspired new technology, new businesses, and brought a whole new side to our financial system. However, it would have been nice if we didn’t have to go through the economic problems that we did in order to arrive at its establishment.
Former Bank of England governor Mervyn King explains that people are presently “sleepwalking” towards another global recession. This time around, however, if a recession of 2008’s magnitude was to strike again, it would likely take bitcoin down permanently, and there would be no recovery for digital coins anywhere.
In a recent interview, he states:
Sticking to the new orthodoxy of monetary policy and pretending that we have made the banking system safe, we are sleepwalking towards that crisis. Another economic and financial crisis would be devastating to the legitimacy of a democratic market system. No one can doubt that we are once more living through a period of political turmoil, but there has been no comparable questioning of the basic ideas underpinning economic policy. That needs to change.
Bitcoin bull Max Keiser added:
Bitcoin adoption has always been driven by bank failures, bailouts, bail-ins and political unrest.
Some Strange Behavior Indeed
His message correlates with a lot of odd bitcoin behavior we’ve witnessed over the past few weeks. Things started out very rough when Bakkt – the institutional trading platform that’s owned by the Intercontinental Exchange (ICE) – debuted to very mixed reception in late September. While things eventually picked up, bitcoin suffered greatly and dropped about $1,400 in just a few minutes.
From there, the anticipation regarding Mark Zuckerberg’s upcoming Libra testimony before Congress became too much to handle, and the currency fell even further into the $7,000 range. However, it has since managed to regain its strength and has added about $2,000 more to its overall price since that latter drop.