Bitcoin Set to Benefit as US Recession Becomes Base Case for 2025
Weak GDP Data, Rising Unemployment Put Federal Reserve in a Policy Bind
Bitcoin is positioning itself as a safe-haven asset as economic signals increasingly point toward a looming US recession in 2025. According to market analysts and macroeconomic data, the Federal Reserve is being forced into a critical decision: fight inflation or curb rising unemployment.
Fresh data released this week, including a disappointing Q1 GDP report and rising inflation concerns, paints a stark picture. GDP turned negative, against expectations of a 0.3% increase, amplifying fears of stagflation — the toxic combination of slowing growth and rising prices.
“A recession in the US has become our base case scenario,” said trading outlet The Kobeissi Letter, calling the Fed’s dilemma its “worst nightmare.”
Investors Eye Interest Rate Cuts as Bitcoin Gains Traction
The Federal Reserve now finds itself at a crossroads. Cutting interest rates too early could trigger an inflation rebound; delaying action could worsen unemployment and further slow GDP growth.
“Not reducing interest rates will further weaken US GDP and likely increase unemployment,” Kobeissi explained. “But immediate cuts would reignite inflation.”
This policy gridlock is fueling risk-on sentiment among crypto traders, who see looser monetary policy as bullish for digital assets like Bitcoin. At the time of writing, Bitcoin trades at $96,212, with analysts anticipating a further push upward as liquidity returns to the system.
The CME FedWatch Tool shows a growing consensus for a 0.25% rate cut in June, with probability rising from 57% to 63% in just one day, according to market analyst Skew.
Crypto Poised to Thrive in Recession-Driven Liquidity Shift
As macroeconomic conditions tighten, Bitcoin and other risk assets are increasingly seen as potential winners in a downturn. Crypto trader and analyst Michaël van de Poppe believes the Fed will be forced to pivot soon.
“The rumours for a potential recession are increasing, which should strengthen the thesis for the Fed to loosen up policy,” van de Poppe noted. “That will likely be a low on the markets, liquidity to be added and risk-on to thrive.”
President Donald Trump has maintained pressure on the Fed to lower rates — but it’s now the data, not the politics, that is moving markets.
As 2025 unfolds, Bitcoin is being recast not just as a speculative asset, but a macro hedge, one with growing appeal in a world of economic uncertainty.
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