Sentiment among investors in traditional markets suggests that a fairly major worldwide economic recession could be just around the corner.

Historically, precious metals have performed well as a store of value in times of economic downturn. The relatively younger cryptocurrency market, however, has yet to test its resiliency during a worldwide recession.

The first major cryptocurrencies, including Bitcoin (BTC), were born from the ashes of the housing market collapse in 2008. In the years that followed until now, the cryptocurrency market has boomed alongside with the stock market, but a correlation between the two cannot yet be drawn.

Hoarding Gold

In the last year or so, many countries have been increasing their stock of gold. Markets Insider has recently released its list of the top ten countries by ownership of gold.

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The report notes that the volume of gold purchases by central banks reached a new 50-year high in 2018.

European and Asian countries take the second to tenth spots on the list. The United States took the top spot, possessing as much gold as the next three countries (Germany, France, and Italy) combined.

A large portion of the gold owned by the US has been kept in reserves since the days of the gold standard pre-1971.

Holding Crypto

Some countries like Russia and China have been hedging their bets in a more diversified strategy by buying up gold and Bitcoin. This has been mostly been attributed to an attempt to decouple their fiat currency from the US dollar.

According to a report released by Hootsuite earlier this year measuring cryptocurrency ownership by internet users, both China and Russia fall below the worldwide average of 5.5 percent.

It will be interesting to see if cryptocurrencies will act as a safe store of value in the event of a recession, or if the market will plummet alongside stocks.

Do you think gold will outperform Bitcoin in the next economic recession? What will happen to the cryptocurrency market? Let us know your thoughts in the comments below.