IMF Expects Worst Economy Since Great Depression: Will Crypto Be Spared?

IMF's Managing Director, Kristalina Georgieva, said that her organization is currently projecting the worst economic contraction since the Great Depression
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Just two months ago, everything seemed fine and dandy: the stock market in the U.S. was setting new highs day over day, consumer confidence was high, and innovation was taking place at a rapid clip — a seeming perfect recipe for economic growth.

But, once the coronavirus struck the global economy, it was clear this wasn’t the case. Billions of individuals around the world were put (and are still in) a state of lockdown, whereas discretionary spending has collapsed,

But it may get worse. According to the International Monetary Fund, the international organization promoting economic growth and monetary stability, and other commentators, there’s a good chance that what we’re seeing is well worse than any crisis we’ve seen since the Great Depression of the 1930s.

With this, some have feared that the viability of Bitcoin and other crypto technologies could be put into question.

Ongoing Economic Slowdown Could Near Depression Levels, Many Fear

Speaking in a speech Thursday, the IMF’s Managing Director, Kristalina Georgieva, said that her organization is currently projecting the worst economic contraction since the Great Depression for this year.

For some context, during the Great Depression, it was estimated that the worldwide GDP fell by 15% and unemployment reached ~25% in countries like Canada, the U.S., and Germany. Unemployment is currently estimated at 15% and the GDPs of global economies to shrink by single-digit percentages this year.

Understandably, Georgieva attributed the IMF’s sentiment to the lockdowns to contain the virus:

Because it is such a gigantic, dramatic development, a virtual standstill of the world economy, it requires massive, well-targeted measures.

These fears have been echoed by Ray Dalio, who said in a recent digital TED Talk that while he is hesitant to use the word “depression,” he sees an ongoing crisis that is likely worse than 2008’s Great Recession.

Also, Raoul Pal of Real Vision has weighed in. The former Goldman Sachs executive said in a recent video update that while he, too, is hesitant to call the ongoing crisis a “depression,” there’s a good chance much of the global economy unwinds to a point that it will be hard to recover from.

It’s Not All Bad for Bitcoin: Here’s Why

While the value of most assets went into a downward spiral during the Great Depression, with the Dow Jones actually shedding some 80% of its value from its all-time high over the course of a multi-year correction, some think that Bitcoin actually stands to benefit from the economic conditions.

But there’s a catch: it will only benefit if governments and central banks respond with fiscal and monetary stimulus.

Chamath Palihapitiya, CEO of venture fund Social Capital and a former Facebook exec, summed up the sentiment nicely in a recent interview with Anthony Pompliano.

Per previous reports from Blockonomi, the Silicon Valley figure said the global economy is driving “towards a cliff” whereas there is likely to be a massive deflationary or inflationary event, depending on how governments and central banks act. He believes this cliff, so to say, has the potential to push Bitcoin into a place where it could “emerge as a flight to safety.”

In a deflation scenario, Bitcoin could act as a hedge against the collapse of debt and traditional institutions; in the inflation scenario, BTC’s scarcity would likely allow it to easily outperform the dollar and other fiat currencies.

Palihapitiya said, in fact, that the crisis could allow Bitcoin to rally to a price of “millions.” But, he added that the cryptocurrency could also hit $0.


I am a writer who has been following the cryptocurrency space since 2013. My insights and interviews have been featured in leading publications in the industry such as LongHash, NewsBTC, and Decrypt. When I am not writing, I work as a team member of the EXODUS division of HTC, a Taiwanese electronics company. I own a small amount of Bitcoin. Contact

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