Sherb
Ban reason = Abuse of Mods
- Dec 26, 2010
- 1,968
- 18,138
This is not strictly related to cryptocurrency, but applies.
I have seen several mentions over the past few months in this subsection about crypto's "crash" triggering a recession. I won't get into the narrow mindedness of that, but will instead go broader. I've seen other mentions that a stock market crash would trigger a recession as well.
I'm here to inform you that this is not how these things work.
Stock markets, and especially crypto markets (the total of which would barely register in comparison to the companies on the DJIA*), are absolutely not indicators of the world/US economic status. This past week the market dropped 10%. That's a minor correction in a market that experienced 30 to 40% steady gains in the past year. Most people didn't even take notice of this. Please remember, there is an entire world outside the crypto/financial hivemind. A very high percentage of people even here in the US have no clue what cryptocurrency even is**.
* If you are looking for a good market indicator, stop looking at the Dow. It's 30 companies, and is only the go-to for the media because it's the most well known. Look at the S&P 500 instead.
** There are only 17 million addresses with over $1 in BTC. If we assume double that on the high end, that's 34 million people invested in cryptocurrency. Surely it's far lower, taking into account people with multiple addresses. If it was anything close to 34 million, though, that's not even 0.5% of the world population. That's not even 10% of the US population. That's like if everyone in Texas knew about cryptocurrency, but nobody outside state lines had any clue. It's not the world changed you think it is.
I have seen several mentions over the past few months in this subsection about crypto's "crash" triggering a recession. I won't get into the narrow mindedness of that, but will instead go broader. I've seen other mentions that a stock market crash would trigger a recession as well.
I'm here to inform you that this is not how these things work.
Stock markets, and especially crypto markets (the total of which would barely register in comparison to the companies on the DJIA*), are absolutely not indicators of the world/US economic status. This past week the market dropped 10%. That's a minor correction in a market that experienced 30 to 40% steady gains in the past year. Most people didn't even take notice of this. Please remember, there is an entire world outside the crypto/financial hivemind. A very high percentage of people even here in the US have no clue what cryptocurrency even is**.
- The dot-com crash was barely a recession, and it was only due to the overall impact on GDP. The unemployment rate remained low, the housing market was fine.
- The stock market crashed hard in 1987. There was no associated recession.
- From 1980 to 1982, there was a US recession. Stocks were unaffected.
- In 1992, there was another US recession. The market as a whole went up that year.
* If you are looking for a good market indicator, stop looking at the Dow. It's 30 companies, and is only the go-to for the media because it's the most well known. Look at the S&P 500 instead.
** There are only 17 million addresses with over $1 in BTC. If we assume double that on the high end, that's 34 million people invested in cryptocurrency. Surely it's far lower, taking into account people with multiple addresses. If it was anything close to 34 million, though, that's not even 0.5% of the world population. That's not even 10% of the US population. That's like if everyone in Texas knew about cryptocurrency, but nobody outside state lines had any clue. It's not the world changed you think it is.
