Economist: 2020 Will be Worse Than 2008 Recession, Institutions Will Favor Bitcoin

Nouriel Roubini, a well-recognized economist and a professor at Stern School, believes a financial crash worse than the 2008 recession will hit US markets by 2020, which may lead institutional investors to commit to crypto as an alternative store of value and asset class.

On Project Syndicate, Roubini outlined 10 major factors that will fuel the next financial crisis, with one of the main factors being the rising inflation rate dictated by the Federal Reserve.

If a financial crisis occurs in the next two years as predicted by Roubini and most recently, Kim Dotcom, then every traditional asset and commodity including stocks, bonds, and currencies will suffer a steep decline in value.

As Roubini emphasized, the increasing financial obligations of the US, which is evidently portrayed by the staggering increase in mortgage, student loan, and credit card debt, is expected to intensify the next recession, which may make it worse than the 2008 financial crisis.

For many years, Roubini has been an avid critic of Bitcoin, stating that cryptocurrencies offer no value to the economy and that they have failed to evolve into major currencies.

As seen in the increase of adoption of cryptocurrencies by regulated financial institutions like Goldman Sachs, Morgan Stanley, and Citigroup, it is obvious that banks, institutional investors, and investment firms do not side with criticism that offers meritless arguments to condemn the legitimacy of cryptocurrencies as an emerging asset class.

Anthony Pompliano, founder and partner at Morgan Creek Digital, stated that institutions will feel pressured to invest in the cryptocurrency market in the upcoming years as an alternative to traditional assets that are deeply correlated to the broader financial market.

Unpopular opinion: Institutions will come under pressure in next 5 years if they have 0% exposure to Bitcoin & digital assets.

Already, driven by the efforts of Coinbase, BitGo, Goldman Sachs, and many other companies in the finance sector to develop trusted custody solutions around cryptocurrencies, institutions have started to take interest in committing to the asset class.

The emergence of the next financial crisis will only speed up the rate at which funds from the traditional finance market flow into the crypto sector.