The cryptocurrency market has been facing significant bearish movement for over a year now, with major coins like Bitcoin, Ethereum, and Litecoin notably plummeting in price valuation. According to two-thirds of the world’s leading economists, an impending economic recession was fast approaching the financial paradigm of major institutions.
Kyle Chapman, a partner at Cosimo Ventures recently gave his two cents on the topic, suggesting that Bitcoin stood a chance of surviving the forthcoming recession. However, Chapman believes that unlike Bitcoin, Ethereum did not come under the same survival blanket.
Kyle Chapman believes that since decentralized virtual assets were introduced to the masses only at the end of the housing crisis, the cryptocurrency ecosystem is yet to experience a full-blown recession or a staggering bear run.
Chapman gave BTC the upper hand in surviving such a recession due to its “fully decentralized” traits. The absence of stock market links and its cyclical undulations were a major reason for this, added Chapman. Similarly, he felt Ethereum was more attached to the stock market than Bitcoin, which would lead to be its eventual downfall during a recession.
Chapman further mentioned that during a recession, Bitcoin may serve the market like a secured commodity, rather than an equity, due to its deep-rooted scarcity and decentralization. Bitcoin was not developed by design or principle to be used as a platform on which developers could start an enterprise. Bitcoin’s supply is not controlled by any person or organization and hence, it was more likely that Bitcoin will perform with authority during intense market movements, he said.
Ethereum however, is a developer-focused blockchain, which is very much dependent on how many organizations use its platform to build products, Chapman said. He added that Ethereum was closely entangled with equity markets, implying its vulnerability during a recession.
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