This topic has been debated a lot lately. "If stocks crash what will bitcoin do?".
The amount of leverage in the banking system is at record highs, with banks seemingly over-exposed to the most over-valued and fragile markets in their own regions.
The next recession/equity crash will not leave banks unaffected.
Over the last decade QE and historically low interest rates have fuelled bubbles in all assets. Everything in G20 countries looks over-valued.
What is the silent nightmare scenario? Stagflation. A period of rising inflation while simultaneously being in a recession.
This is important because no central bank wants to fight a recession where they have to lower interest rates while simultaneously fighting rising inflation where they need to raise interest rates. Afterall, how can you raise rates and lower rates at the same time.
They know 2008 is going to happen again, and banks are going to fail again, but next time because of the last decade of extreme "easy money" inflation will rage unabated. So how can they keep a lid on inflation at the same time a financial crisis hits? Instead of printing money to bail-out banks, fueling inflation, they will allow banks to bail-in customer deposits, this takes money directly out of the hands of average citizens and the less money they have to spend the less inflation will rise.
Over the last few years the EU, UK, US, Canada, Australia and New Zealand have ALL legislated bail-in law making it completely legal for failing banks to confiscate customer deposits to remain liquid and protect their balance sheets.
Seems perfect, save the banks and put a brake on inflation at the same time. This way rates can be lowered again in the next crisis without worrying about inflation.
The problem with this of course is bitcoin exists. The demand for gold and bitcoin in a period of bail-ins will be astromomical. Would you rather buy bitcoin and deal with its volatility or see a bank take 50% of your money. What if you hold $100,000 in a bank and bail-in law allows banks to take 50% of everything over $50,000, you are going to want to protect that money by holding cash under your matress or buying bitcoin, and bitcoin is just a little bit easier to store than $50,000 in $100 bills under your matress.
Plus dont forget Cyprus in 2013, during this time cash withdrawls will be basically impossible with a restriction on how much you are allowed to withdraw per week. The only option left is to wire money out to buy bitcoin.
TLDR: the next financial crisis / global recession / stock market crash will probably see bitcoin tumble initially just like gold dipped momentarily in 2008, but as soon as banks start asking for bail-outs or begin using their new found power to bail-in from their customers deposits bitcoin will rise dramatically.
A lot of people heard about bitcoin for the first time in 2013 during the Cyprus bail-in where Cypriots were on the news talking about how they exited the banking system using bitcoin. Now imagine that happening globally.
