The Recession and Cryptocurrencies: A Parable of the Future?
A recession is a period of economic decline, characterized by a decline in economic activity, jobs, and incomes.
In 2023, the global economy is still affected by a number of factors, including the COVID-19 pandemic, the war in Ukraine and rising inflation. As a result, there is growing concern that the economy is heading for a recession.
Some experts claim that the recession has already happened in 2022.They argue that the data collected by the statistics offices is skewed by the lockdowns due to the pandemic and people figuring out how to survive without working as in last.
Furthermore, they claim that there is a large amount of money on margin, which will drive the stock markets higher. Money on margin is money borrowed to invest in stocks. When people start investing on the sidelines, this can lead to a rise in stock prices.
However, it is important to note that the data collected is only an indicator of the state of the economy. There are other indicators that suggest a recession is possible, such as rising inflation and slowing economic growth.
Impact on cryptocurrencies
If the recession has already happened, it could have a negative impact on cryptocurrencies. Cryptocurrencies are a risky asset and are often considered a speculative investment. As a result, they are more likely to be affected by a recession than other assets such as stocks or bonds.
- Additionally, CBDCs, which are digital currencies issued by central banks, could pose a threat to cryptocurrencies. CBDCs could be more convenient and secure than cryptocurrencies. They could also be more accepted by merchants.
A Parable of the Future?
The recession of 2023 could be a parable of the future of cryptocurrencies. If the recession turns out to be real, it could lead to a drop in cryptocurrency prices. Additionally, CBDCs could pose a threat to cryptocurrencies....or maybe...
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