Analysts discuss the potential impact of a U.S. recession on Bitcoin's value. Bitcoin has previously experienced various recessions, and analysts believe many concerns are already priced in.
Bitcoin’s Historical Performance During Recessions
In a recent report by Bitwise, it was noted that during the COVID-19 recession, Bitcoin initially dropped by 50% but ended the year with a 300% gain. This shows potential for growth after an initial drop. Analysts believe that although significant recession-related fears are priced in, further declines are possible if a recession materializes.
Current Market Uncertainty Factors
Analysts note signs of 'peak uncertainty,' with U.S. economic policy uncertainty mirroring levels seen during the Covid crisis. Additionally, Google search trends for the term 'recession' are at levels comparable to those during the pandemic. Analysts from QCP Capital warn that new tariffs announced by Donald Trump could increase current economic tensions.
Role of Traditional Banks in Stablecoin Sector
Matt Hougan, Chief Investment Officer at Bitwise, remains skeptical about traditional financial institutions entering the rapidly evolving stablecoin sector. In a post on the X platform, he expressed doubts on major banks' ability to capture a significant market share.
While much of the recession fear may already be priced into Bitcoin, uncertainty remains significant. Economic decisions, such as new trade tariffs, could heighten market tensions, placing pressure on cryptoassets.
