The recent 0.3% contraction in US GDP creates new conditions for the Bitcoin market and similar risk assets, as economic shifts may impact Federal Reserve decisions.
US GDP Decline and Potential Fed Policy Shift
The US GDP has contracted by 0.3% in the first quarter of 2025, marking its first negative growth since 2022. Analysts like Valentin Fournier from BRN suggest that this decline may prompt the Federal Reserve to consider a more accommodative monetary policy. Such a policy shift could enhance liquidity for risky assets like Bitcoin.
Bitcoin's Market Position Amidst Economic Uncertainties
Currently, Bitcoin (BTC) trades at $96,875.44, with a market cap of $1.92 trillion, commanding a 63.84% dominance per CoinMarketCap data. Despite broader economic challenges, the price has increased by 0.88% in the last 24 hours and by 3.46% over the past week. Analysts from Coincu anticipate that a dovish Fed could further enhance Bitcoin's appeal for investors.
Expert Opinions on Bitcoin's Future
David Hernandez, Investment Expert at 21Shares, stated, "Bitcoin is more durable compared to stock rates and that this may revive institutional demand." It is worth noting that historically, recession fears have shifted capital to Bitcoin, similar to actions observed in 2022 during economic downturns.
Thus, the decline in US GDP and the potential shift in Fed policy create conditions for alternative investments, including Bitcoin. Interest in cryptocurrency may increase, impacting its market position in the future.
