The Oncoming Economic Headwinds And Cryptocurrency
Many are forecasting that we are going to see economic headwinds. I think, in looking at some of the data, that this is a foregone conclusion. The question is how fast and deep this is. Either way, we will be looking at how this will affect cryptocurrency.
In this video I discuss how we have an opportunity in the long-term to remake the financial system. In the short term, however, from a market perspective, crypto is going to feel much of the same pain as everything else.
▶️ 3Speak
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if it is true in the short term we will surely suffer but we have all the opportunity in the world to allow ourselves to withstand that economic gale that many predict
I think it depends but it does give crypto an opportunity to grab some of the market shares. If they do it well, then I think we can flip the narrative and remake the system in a few decades.
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Summary:
In this episode, Task discusses the impending economic collapse that many are predicting and its potential impact on cryptocurrency. He emphasizes that currently, cryptocurrency is not a safe haven and highlights the correlation between traditional market downturns and crypto. Task predicts that this correlation might continue for the next few years due to the risk-on, risk-off nature of the market. He delves into the concept of economic hits growing in severity and the necessity of deleveraging and devaluing overinflated assets in the economy. Task stresses the importance of building a resilient digital and crypto-economic system to potentially leverage economic headwinds and alter the existing financial system.
Detailed Article:
Task starts by acknowledging the widespread concern about an impending economic collapse and its repercussions on the cryptocurrency space. He reiterates that, contrary to popular belief, cryptocurrency is not a guaranteed safe haven during economic crises. Task explains that crypto is likely to be negatively affected whenever traditional markets experience a downturn due to the risk-on, risk-off dynamics that currently exist.
He goes on to discuss the cyclic nature of economic problems and the increasing magnitude of economic hits that have to be addressed to prevent severe recessions. Task emphasizes the continuous efforts to stimulate the economy through measures like mortgage and rent forbearance, but points out the necessity of allowing the economy to cleanse itself by devaluing overinflated assets and deleveraging.
Task draws parallels between current economic challenges and past crises, notably the 2008 financial crisis, where significant efforts were made to prevent economic catastrophes. He explains that the lack of required deleveraging in the aftermath of previous crises has led to prolonged economic struggles and slower growth rates globally since 2008.
Moreover, Task highlights how the prevalence of deflationary money and reduced collateral in the economy has impacted international trade and funding opportunities, particularly affecting small businesses. He underlines the importance of building a strong foundation and infrastructure in the digital and crypto-economic space to potentially leverage economic headwinds in the future.
In conclusion, Task stresses the need for continuous development and security within the cryptocurrency ecosystem to prepare for potential economic downturns. He advocates for a grassroots, bottom-up approach to strengthen the system, as relying solely on traditional powers during crises might not be the most viable solution in the long run. Task emphasizes the importance of resilience and innovation to ensure the crypto-economic system's ability to step in and transform the current financial landscape during times of economic turmoil.