Despite Bitcoin incorporating a significant amount of recession concerns, analysts are warning that potential risks may still be in store.
Bitcoin (BTC), along with various altcoins, has likely already accounted for numerous fears surrounding a U.S. recession; however, there remains a possibility for additional declines if the recession unfolds.
In a recent analysis, experts from a cryptocurrency management firm indicated that Bitcoin’s performance during previous recessions has yielded mixed outcomes. For example, in the 2020 COVID recession, Bitcoin dropped by more than 50% but ultimately finished the year with a remarkable gain of over 300%.
Following this precedent, the analysts suggest that “it is quite probable Bitcoin will remain under pressure if equities continue to decline.” Currently, Bitcoin has seen a drop of approximately 27% from its peak, implying that a majority of the recession concerns have already been factored into the price.
“The main takeaway is that fears related to a U.S. recession are already being factored into Bitcoin and other cryptocurrencies at this moment, but there might still be some additional downside if a recession actually occurs.”
Nevertheless, the analysts also observe indications of “peak uncertainty,” emphasizing that U.S. economic policy uncertainty is “as high as it was during COVID” and that search trends for the term “recession” are similarly elevated.
Additionally, earlier commentary noted that markets are honing in on President Donald Trump’s forthcoming “Liberation Day” announcement on April 2, during which he is expected to reveal new reciprocal tariffs.
The analysts highlighted that with consumer confidence at a 12-year low and equities already facing a 4-5% weekly decline, aggressive trade strategies could exacerbate recession fears and put further pressure on risk assets, including Bitcoin.