Kyle Chapman, a partner of the tech venture capital company Cosimo Ventures stated that if a recession happens Bitcoin will likely survive it but Ethereum would very much suffer. As for Ripple, it will remain unaffected and this prediction is what we are reading about in today’s altcoin news.
Chapman believes that a recession won’t hurt bitcoin because of its decentralized nature and because of its independence from the stock market’s cyclical movements. However, the Federal Reserve chairman Jerome Powell believes that there won’t be a recession in the US anytime soon. Other economists agree with the statement.
As for the crypto market, Chapman says that Bitcoin can become a safe-haven asset while its price could increase during an economic crash. He stated:
“Faced with a recession, Bitcoin may serve a market function similar to that of a safe-haven commodity, rather than an equity, due to its inherent scarcity and decentrality. Bitcoin, by design, is not intended to be used as a foundation on which developers could build a platform or enterprise. Because its supply is not controlled by any one person or entity, it’s more likely that Bitcoin will perform independently of broad market pressures.”
On the contrary, Ethereum is expected to underperform during a recession because it is closely related with the equity markets than other cryptocurrencies. Also, ETH follows the stock market trends. Chapman continued:
“Because Ethereum is a developer-focused blockchain, it’s very much dependent on how many companies use the Ethereum platform to build their projects. If those companies were to go out of business, Ethereum’s relevance and, subsequently, its price, would undoubtedly be affected.”
As for Ripple, XRP would be unaffected by the recession because it is more alike as a medium of exchange that operates independently on the market:
“Because XRP functions outside the purview of mainstream markets, it’s certainly reasonable to believe that XRP would act independently in the event of a recession.”
Chapman believes that the recession is not really close yet. However, the digital asset industry should expect it because it’s overdue for one. If this happens, Chapman says that this is a good thing for the industry since when a disruption happens, wheat is separated from the chaff.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]