During this summer, I said that most users of fiat money will stop using it until 2020. I might be wrong. During the bull run, we had many different problems, from market manipulation to government bans. Bitcoin's price kept going up, like nothing is a problem.
Now I understand that what seemed as a positive sign is infact the biggest vulnerability of cryptocurrency. Volatility is great for the knowledgeable and lucky traders. It's also awesome for the testosterone-filled beasts that got rich in the bull run.
For the rest of the world?
Useless. An average Joe can't go to the store to buy a bag of potatoes with some altcoins. Even if the store owner accepted the altcoin as a form of payment, it's possible that Joe wouldn't have enough of it to buy the bag by the time he got to the store. Maybe he would have even more. The point is, you can't expect an altcoin to be worth the same just an hour later.
Analysis does show the trends go towards less BTC volatility. They say the volatility of fiat and cryptocurrency will be the same by 2019. Which is positive for crypto.
If that doesn't happen, if the correlation stops for some reason, or if the market cap doesn't grow anymore, tethering might be more probable than flippening. Digital money is useful either way, but with a stable coin we have the ability to go mainstream, with speculative assets we don't. As long as crypto is so speculative it won't be used as currency.
There are cryptocurrencies backed by fiat, not real-world value. Fiat is printed, inflated and controlled by a central authority. The price of it doesn't necessarily stay the same compared to food, housing or something else. Not only do you need to trust the government that it will not print too much of it, you also need to trust the backing company that it holds the fiat amount equivalent to circulation supply of the coins.
When hyper-inflation kicks in, it's hard to say what will come out as valuable after it.
Will people regain the trust in the same institutions that tricked them time after time?
Will they go back to gold and silver?
Will many people go off-grid and develop their own, smaller economies?
Will they put their trust in global decentralized systems?
The last recession we had was in 2008., since then, crypto has been made and popularized. Recession happens approximately every 5 years, and we haven't had one for 10... This one might be more powerful than anything we saw before due to the long period of bullish markets. The most important thing for me is the outcome. The impact it has on society and economy.
What do you think will it be?