Bitcoin Crash-Can it knock over the Global Economy


The relentless surge and fall in Bitcoin prices are bound to give rise to much speculation among those keeping track of the cryptocurrency. Many would tend to believe that a crash in this product would cause the global economy to tumble down.

My take on this investment mode and the current fluctuations is quite different, however. Considering that only around a thousand individuals retain currently as much of 40 percent of the much in-demand cryptocurrency, coupled with the fact that a market ceiling of $137 billion USD has been set on it, a probable crash would have a negligible effect on the world economy, in general.

In contrast to the above, I would like to remind my readers of the financial meltdown in 2008, which caused Americans to lose a massive amount to the tune of $12.8 trillion USD. However, if a Bitcoin crash were to happen, financial stability would be largely unaffected.

It is only when dominant members of the market take a hit that the economy can be undermined. A case in point is how the US economy was knocked off balance by the subprime mortgages. Players as important as multinational banks took a hit when creditors defaulted on defective loans doled out by these banks.

Bitcoin takes up too much of a minuscule space in the entire global economy to leave much of an impact, should a crash occur. I certainly cannot deny, however, that a Bitcoin crash would affect the domain of investors laying their money in this field. People who have put in their money may lose their investments. However, as I have outlined above, since there are very few investors in this field, the global scenario will be largely untouched.

On the other hand, in a larger perspective, a crash may have a positive effect. After the expected crash, the remaining elements of the crypto currency sphere would languish, leaving the fistful of investors quite high and dry. But this could allow the more stalwart companies to make a strong comeback, making for a more robust economy into the bargain.

To bolster my argument above, I could cite the example of the dotcom crash, which spanned from 1997 to 2001. When the bubble burst, the more resilient businesses like Amazon, eBay and a few others emerged stronger than before. In the same way, Bitcoin crash may be for the greater good, after all.

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