US Recession
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months. It is visible in industrial production, employment, real income and other indicators. A recession generally includes two consecutive quarters of negative economic growth as measured by a country’s Gross Domestic Product (GDP).
The most recent US recession began in December 2007 and ended in June 2009. This period was marked by extreme volatility in financial markets due to the collapse of several major investment banks, an increase in unemployment to 10%, and sharp declines in consumer spending, housing prices and business investments. The Federal Reserve took aggressive action during this time which included cutting interest rates to historic lows. As a result of these actions, GDP returned to positive growth after experiencing nine consecutive quarters of contraction beginning with Q4 2008.
Cryptocurrency & US Recessions
Cryptocurrencies have been around for nearly 10 years but their impact on recessions has only recently become apparent. During times of uncertainty such as an economic downturn or stock market crash investors tend to flock towards alternative investments that are seen as safe havens such as gold or cryptocurrencies like Bitcoin and Ethereum . Since cryptocurrencies are decentralized they are not tied directly to any government or central bank policy making them potentially attractive assets during periods instability when traditional currencies may be losing value relative to other global currencies or commodities .
While cryptocurrency prices do appear somewhat correlated with broader macroeconomic conditions there does not appear to be enough data available yet for analysts conclusively link the two together over long term horizons. In general however it appears that digital assets can provide some level of stability when faced with broad-based market selloffs driven by fears surrounding the underlying health of an economy . Furthermore given their limited supply they often act countercyclically compared with fiat currency values meaning they could potentially appreciate during times where governments attempt large scale quantitative easing programs intended stimulate economies out recessions .
