There are two kinds of financial crisis:
1. Liquidity crisis. People panic, and want to get out of all kinds of financial contraptions in order to get their wealth into bank accounts and
cash. Mutual funds etc. are in turn forced to sell their assets, even those assets they consider good bets. The situation is made worse by VAR (Value at risk) risk measures, which force funds to sell an asset if its volatility increases.
2. Solvency crisis. This is when people start worrying about the ability of banks, brokers, companies, even countries to meet their liabilities. They want to get out of the financial system altogether. Money in a
bank account is no longer considered safe (re: Cyprus 2012-13), even cash is shunned because of a perceived inflation risk.
We are now in liquidity crisis. Every asset is sold in panic, even assets like gold (happened also in 2008).
IF this crisis develops into solvency crisis (let's hope it doesn't), investors will run for an exit. Those exits are few - mostly gold and
bitcoin.
Bitcoin has performed miserably in this liquidity crisis. Somebody might have guessed this, based on the fact that nowadays many hedge funds own it. I dont see the near future that bleak: The weak hands are hopefully gone, and the mining supply will halven in 50+ days. As to the stock market, there will be bounces, but it would not surprise me if we aren't even halfway to the bottom.
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