Bitcoin (BTC) is often referred to as a hedge against inflation, but 2022 has served the detractors of this statement a favor. The price of bitcoin is currently about 75% away from its all time high in November 2021. The vast majority of altcoins have collapsed even further this year than the king of cryptocurrencies.
The carnage is not only present in the crypto markets, as the stock markets are also struggling. Meta, the parent company of Facebook and Instagram, among others, has experienced a decline similar to bitcoin. The current macroeconomic situation has dealt a significant blow to both assets, but bitcoin still appears to be more ‘recession-proof’ than Meta.
Origin Bitcoin
The Bitcoin whitepaper was shared in an email on October 31, 2008, just after the 2008 economic crisis, to a so-called “cryptography mailing list. A few months earlier, the fall of the American bank ‘Lehman Brothers’ was seen as the start of a global credit crisis, which shortly afterwards turned into a general economic crisis. Confidence in the banks and economy fell to an all-time low and Bitcoin seems to have emerged as a solution in which trust is no longer a requirement.
You could read earlier that Charles Hoskinson, the founder of Cardano (ADA), shared this opinion. He had said that the crypto industry was created in response to the problems that led to the financial crisis in 2008.
BTC vs Meta
Due to the sky-high inflation, central banks have been forced to raise policy rates, but an additional effect is that the economy is being slowed down at the same time. It is seen as the price we have to pay for reducing inflation.
By the general definition, the United States has been in recession since the summer. A recession is when there is a negative gross domestic product (GDP) for two consecutive quarters. Partly due to tinkering with the definition of a recession, it is currently being denied by everyone and everything.
BTC and Meta have experienced a similar decline, but Bitcoin has fallen back to the higher prices of 2017 and 2018 while Meta has fallen back to 2015 levels. With this, Bitcoin seems to have performed relatively less badly in the current macro -economic circumstances.
$METAone of the largest publicly-traded tech companies and parent co to some of the largest brands in the world (FB, IG, etc) fell the same amount at $BTC yet #META fell back to 2015 prices, while BTC only fell to 2017/2018 prices. Why is nobody talking about this? #BITCOIN pic.twitter.com/DwoaHRn0lm
— Tony “The Bull” Spilotro (@tonyspilotroBTC) December 5, 2022
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