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The American economy could be headed for another sharp tumble! Get into Bitcoin as a hedge against potentially harsh economic times.
USA, Economy, Bitcoin
The US economy could be headed for another recession soon.
Barely seven years after the last great recession, several economic indicators point to a renewed downturn possible in the near future. According to a report by CNBC, investment is down across the board, including specifically in farm machinery, while transportation sales have stalled. These indicators are usually a good predictor of a recession, and investors look to them when gauging future financial decisions.
To make matters worse, Citigroup now predicts that, in the event that Donald Trump wins the presidential election in November, that could trigger a worldwide recession as global uncertainty rises.
According to a recent poll by Marketplace and Edison Research, 71% of Americans view the economy as rigged in favor of certain parties. This view will almost certainly be amplified in the event of a further economic downturn.
While the US is looking to be due for a recession, that by no means that the rest of the world will be spared. In Europe, EU banks, particularly those in Italy, may soon need a $166 billion bailout. Additionally, because turmoil caused by the UK’s recent Brexit vote, the EU could be on a path to an eventual collapse, leaving the euro’s future in doubt.
Meanwhile, Japan, faced by continuing economic stagnation, has implemented a new round of stimulus spending. This could have the effect of inflating the yen, causing the currency to devalue against Bitcoin.
In the event of a recession, a portfolio diversified with several different assets, including cryptocurrency, will be much more resilient than one with only fiat currency and stocks. In times of economic turbulence, Bitcoin, like gold, acts as a hedge, rising in value as traditional investments fall.
In fact, Bitcoin, long known as an exciting but unstable currency, passed the British pound in stability during the whole Brexit process. Additionally, Erik Voorhees, ShapeShift CEO, pointed out that Bitcoin has now achieved the stability of a large cap stop, further increasing its attractiveness as an investment in trying economic times.
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