Analyst Nic Puckrin stated that the US might face a 40% chance of recession in 2025 due to a potential protracted trade war and macroeconomic uncertainty. This will lead to a decline in risk-on assets like cryptocurrencies.
Macroeconomic Uncertainty and Recession
According to Nic Puckrin, while a recession is possible, it is not the most probable scenario yet. However, the odds have significantly increased. One reason for this forecast is President Trump's administration policies aiming to cut federal spending and jobs, which might lead to economic downturns.
Impact of Trade War on Cryptocurrencies
President Trump's tariffs on US trading partners have caused significant declines in crypto markets, with Bitcoin (BTC) experiencing a 24% correction from its January 2025 high. This has also shifted market sentiment towards extreme fear.
Forecasts and Market Recovery Potential
Nicolai Sondergaard from Nansen sees the crypto markets under tariff pressure until April 2025. Recovery could occur if countries negotiate tariff removals or if the Trump administration eases its stance. Markus Thielen from 10x Research foresees a potential BTC price reversal due to changes in trade tariff rhetoric.
Thus, macroeconomic uncertainty and trade policies significantly impact the economy and cryptocurrencies. The future largely depends on trade negotiations and US economic policy.
