Recession Fears Weigh Down Crypto Mood
Bitcoin’s push towards a potential all-time high may be at risk as analysts raise alarms about an imminent US recession. Apollo Global Management had forecasted a summer downturn, attributing the sharpest drop in earnings expectations since 2020. Cross-asset strategist Samantha LaDuc supported the forecast in a recent post, indicating the potential threat to global risk assets like BTC.
Tariff Talks in May Seen as Critical to Market Stability
Research analysts say that May could be pivotal for the crypto and equity markets. According to Aurelie Barthere of Nansen, expiry of crucial tariff waivers—such as on Chinese automotive components and sub-$800 shipments—is putting pressure on forthcoming negotiations.
If nothing materializes, we’re going to experience an economic recession and double-digit losses in Bitcoin,” Barthere said. Nevertheless, she emphasized that China and the US both have strong interests in maintaining trade flows. The most likely scenario could be agreements or “agreements in principle” steadying markets, potentially allowing Bitcoin to retest previous highs.
Bitcoin Could Still Rally Despite Recession
Not all forecasts are bearish. Blockchain advisor Anndy Lian said that BTC tends to bounce back historically during economic downturns, as it did during the post-COVID rebound. Although Bitcoin might fall initially along with other risk assets during a sell-off, its value as an inflation hedge might hold up to a rebound.
During stagflation, Bitcoin, like gold, might trap capital as a value store,” Lian added. However, he cautioned that increasing correlation of Bitcoin with technology stocks remains unknown.
Institutional Adoption vs. Economic Risk
Others are still cautious. RedStone’s Marcin Kazmierczak warned that further broad-based economic deterioration and recent tariff actions—such as April’s “Liberation Day” tariffs—could intensify risk-off sentiment. Even as institutional buying increases, crypto still behaves like a speculative asset and remains vulnerable to stress in the market.
“Until crypto gets more meaningfully decoupled from traditional equities, it will remain vulnerable to macroeconomic shocks,” Kazmierczak said.
