I said this same message in my native language in this space, and there must be a lot of counter-arguments against this, given pro-cryptocurrency atmosphere around in Steemit users. There seem to be not a few crypto-assets investors here; I don't know how many invest how much. But some of them should consider this, I think. I put it in English to search for wider opinions; there are very few ones revealed here.
"When a financial crisis comes, cryptocurrencies would be an alternative."
I do not remember well, but there seem to be sayings suggesting a similar view somewhere among my compatriots in this space. I don't know how many think so, and the exact words must have been different from the above, but the spirit seems to be similar. I don't think anyone would embrace such a view, but if you're thinking that way and investing in cryptocurrency assets short term (say, from less than a year to less than two or three years), I'd like to tell you 'get real.'
Perhaps since two years ago at least, it's been said that asset markets including stock markets in the developed world have kept rising for the longest time in history, there are many signs telling various kinds of financial bubbles have been forming, and so another market crash will come sooner or later. There seem to have been sayings that the current bull market is lasting longer than the one (perhaps the longest in history until that time) that ended with the market crash of October 1987.
A recent warning foresees an 'imminent' plunging of U.S. stock markets up to 45-50 percent. That suggestion came before the recent big drop in the U.S. markets, perhaps at the beginnig of this February. Who cares? it's just another warning; there have been so many warnigs, but still markets have kept rising so far.
Anyway, when asset markets come to collapse, the funds moving around and dictating the direction of markets will unconditionally get into safe assets. Large chunks of funds will get out of risky assets like stocks or high-yield bonds, and be running into safe ones such as government bonds, gold, cash, and perhaps certain surefire real estates. If this happened, could cryptocurrency assets be treated as a safe asset by investors?
Of course, not. Why? Just one reason: safety of an asset in the minds of investors comes with time, a long time. Don't you agree?
If, for example, average market returns are -30% in a bear-market phase, assets not being recognized as safe assets among investors will plunge more sharply, say, by -60% or even -90%. Isn't it a natural development?
How long will then this phase─from an abrupt or short-term plummet to subsequent bear markets─continue? It seems to be a bit safer to assume it will take two years at least. Moreover, upcoming bear markets may have not a few reasons to think that they will last longer: it's continually been said that we have been seeing a long phase of credit creation, much greater growth of shadow banking than the boom period up to the previous financial crisis of 2008, etc. & etc.
As many people have emphasized, you should be careful not to invest with the funds you need elsewhere. The funds you need for your children's tuition in two or three years, and the ones you need for paying debts in three to four years, or any money you cannot leave untouched for more than ten years, I suppose you should not invest with short-term horizon in mind, now and in a foreseeable future.