Analysts at a leading cryptocurrency management firm are warning that despite Bitcoin’s current pricing reflecting recession concerns, further risks could still lie ahead.
Bitcoin (BTC) and other altcoins may have incorporated significant U.S. recession fears into their valuations, but they are not immune to potential declines if a recession occurs, according to recent findings.
The analysis indicates that Bitcoin’s historical performance during past recessions has been inconsistent. For example, during the 2020 COVID-19 recession, Bitcoin plummeted more than 50% but ultimately surged over 300% by the end of that year.
Given this historical context, experts suggest that Bitcoin may remain under pressure if the equity markets continue to decline. Currently, Bitcoin has already experienced a 27% decrease from its peak, indicating that many recession fears are likely already priced in.
“The key takeaway is that U.S. recession fears are already influencing the valuations of Bitcoin and other crypto assets. However, there may still be additional downside if a recession materializes.”
Moreover, signs of extreme uncertainty are evident, with U.S. economic policy uncertainty reaching levels comparable to those during the COVID-19 pandemic, and search trends for “recession” reflecting similar peaks.
Market attention is also shifting toward significant announcements, particularly as upcoming political developments may impact consumer confidence, which is currently at a 12-year low. This situation could further amplify recession fears and negatively impact risk assets, including Bitcoin.
