Like there was in 2008/09 when most people in the world lost confidence in banking systems followed by the bailouts and Quantitative Easing.
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> in 2008/09...most people in the world lost confidence in banking systems
You mean when everyone sold securities, moved to cash, and bought Treasuries, CDs and bank deposits?
2008 was great. Everything was on sale, and I doubled down on my stock investments...
With money from where?
If your money wasn't in the market, you might have been lucky with timing but statistically if you replay that scenario, you're losing out on gains by not just parking your money in the market in the long run.
I did get lucky, to be honest. I had low 6 figures in a total stock market fund and a similar amount of cash sitting around.
> With money from where?
Your salary, invest you savings in the market.
And Bitcoin
Ref: http://www.wealthdaily.com/articles/eurozone-turning-to-bitc...
> And Bitcoin
Given Bitcoin's "capitalisation" failed to hit even $10bn until well after the crisis [1], it's safe to say that more capital moved, in almost any single U.S. state, from stocks to corporate bonds, than from anything to Bitcoin. Being optimistic about the future of a technology is fine. Being delusional about its history is not.
Ignoring correlations to market downturns and ignoring the data is delusional https://www.google.com/search?site=&tbm=isch&source=hp&biw=1...
Bitcoin came into existence in 2009. Nobody was buying Bitcoin in 2008 because it did not exist in 2008. We don't have data to support the claim that people would rush Bitcoin amidst stock market crashes. We do have data supporting the claim that they rush into traditionally safe assets, i.e. insured bank deposits and Treasuries.
Regarding Cyprus, wealthy Cypriots--by and large--bought German and Greek government bonds, not Bitcoin.
The crash came into existence in 2008 and Bitcoin began to rise in 2009. https://www.washingtonpost.com/news/the-switch/wp/2014/01/03...
> Bitcoin began to rise in 2009
Bitcoin came into existence in January of 2009. What was it supposed to do? Start stealing its owners' money and go negative?
Also, everything rose in 2009. The S&P 500 was up 23%. Bonds were up, commodities were up...that's what happens after you scrape past a global financial meltdown. Sure, Bitcoin was up like five thousand percent, but that's the difference between a tens of millions and hundreds of billion in market capitalisation, things that are very volatile and things that are not, and venture versus mature.
AFAICT, the source you cited (dated 2013) quantifies the investors merely as 'many Spaniards', and from the grandparent's source, we know that the Bitcoin market cap around that time was around $1bn, which is not even rounding error on the scale of financial markets. You're not ignoring the data, you're imagining it.
The religiosity on the side of "traditional" assets is exactly why they missed the boat. Whenever traditional models are threatened, the pitch forks come out. The VC industry is having it's Uber-moment. The disrupters are being disrupted.
People are downvoting you, but you're not wrong. Bitcoin is legitimately seen as an alternative to gold. So it's not crazy to expect people to buy BTC when shit hits the fan in the fiat markets.
No it's not. The only people that view Bitcoin as an alternative to gold are the people buying/trading in Bitcoin. No one else is that delusional.
> Bitcoin is legitimately seen as an alternative to gold.
Bitcoin may be an alternative to gold but it is not the same.
1) Gold has intrinsic value.
2) Gold is a tangible asset.
Gold having intrinsic value is a straw man argument for it being different than Fiat currencies. Consider this thought experiment. You are going to live by yourself in the forest for a month. Would you rather have A) a weeks worth of food or B) 1 oz of gold. I think this highlights there is no intrinsic value or at least much lower than what people claim. Obviously, there is place for gold in electronics and circuitry, but aside from specialized applications, the need for gold is pretty low.
Now, I know that I've committed a straw man argument myself by using a contrived example. To that, I'll say that the only "value" one has by having gold in the real world is that other people will trade you for it. But this is exactly the opposite of intrinsic value. The value of gold being entirely fabricated by people's desire to hold it.
Gold's price is not supported by its instrinsic value, I'll give you that. But the "forest" test is absurd. By that definition computers, chemotherapy and candy have no instrinsic value.
Gold's value comes from its (a) millennia-long history of stably holding value across cultures and technological domains and (b) its tangibility and physically-enforced scarcity. Its intrinsic value is a fraction of its market value, in part because the inflated price deters lots of uses.
But point a and b in you're assessment of gold's value are two of the most common arguments for crypto, specifically bitcoin, as well.
a) crypto holders believe that the value will hold because as more individuals use it to store their net worth, the harder it will become to manipulate. ie. a history of price growth/eventual stabilization will occur in time.
b) its algorithmically-enforced scarcity, which many people believe is as valid as physically-enforced scarcity. So long as hash-based cryptography always works.
> Gold's value comes from its (a) millennia-long history of stably holding value across cultures and technological domains
That's recursive - you're basically saying that gold has value because it has historically being valuable. Which begs the question of why it has been valuable.
I'm not saying that this doesn't add some (most, in fact) value to gold. I'm just saying that this isn't a property that is enabled by anything specific to gold.
I do admit that my forest example is absurd. I just wanted to elucidate, as you pointed out, the price isn't supported by human's necessity to survive.
Your last point brings up an interesting tangent, if gold wasn't treated as a store of value, what would its price be? Would it be similar to diamonds where synthetic ones are half the price? Are you aware of any sources that try to answer this question?
I'm not sure gold has been stable recently. it has regularly had 30-50% swings up and down over the last 10 years. recently well off it's highs.
What if trade is essential to survival, and gold checks all the marks as the medium for trade? Of course this could only be the case in a primitive society. If you believe contemporary society could revert to a primitive one, then you would be compelled to hold gold as a hedge.