Following President Donald Trump’s “Liberation Day” tariff announcement on April 2, recession probabilities have spiked across leading economic trackers, putting Bitcoin on high alert. Kalshi’s prediction markets now stand at 53%, an 8.1% jump from prior estimates, and Polymarket’s odds have surged to 54%. Tariff Shock And Rising Recession Odds After President Trump’s latest move to impose higher duties—“Liberation Day” tariffs targeting key US trading partners, including a 34% levy on imports from China and 20% on those from the European Union—multiple forecasters revised their recession probabilities upward. The odds have been updated across several respected institutions and platforms: Besides Kalshi and Polymarket, Larry Summers has indicated a 50% likelihood, whereas JPMorgan puts the chance at 40%. According to a CNBC Fed Survey, the odds are 36%, with both Moody’s Analytics and Pimco forecasting a 35% chance. Notably, Goldman Sachs has significantly revised its stance, now estimating the probability at 35%, up from a previous 20%. Related Reading: Corporate Bitcoin Buying Hits Record Levels, Yet Prices Are Down—Here’s Why JPMorgan warns that these tariffs could result in “a $660 billion annual tax increase on Americans,” potentially adding 2% to domestic inflation. The risk of a knock-on effect is underscored by shifting consumer confidence data and the looming prospect of retaliatory trade measures from partners such as Canada and the EU. Goldman Sachs, in its March 30 research note, offered a sobering outlook for 2025. According to the team: “We now see a 12-month recession probability of 35%. The upgrade from our previous 20% estimate reflects our lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies.” What This Means For Bitcoin Renowned crypto trader Bob Loukas captured market sentiment on X, writing: “I’m starting to think we’re heading into a recession or bear market, maybe a milder one, but it’s looking likely. […] We should take it seriously. That said, I think it’s time to move away from the ‘buy the dip’ habit we’ve leaned on during the bull market. […] It might not end up being a disaster, but focusing too much on potential gains could mean overlooking real risks. […] Bonds seem like a good bet, capital has to flow somewhere.” With respect to Bitcoin, Loukas underlines the difficult situation for investor with respect to Trump’s pro-BTC policy: Bitcoin’s tricky, instinct says it struggles, but I can see it holding up as a kind of digital gold, especially since the administration seems to want it to succeed, outside of trade policy stuff. Maybe there is some bias in that last statement.” Aksel Kibar (@TechCharts), a Chartered Market Technician and ex-fund manager, briefly affirmed Loukas’s stance by commenting, “Agreed.” Related Reading: Is The Bitcoin Bull Run Over? Watch This Key Price Meanwhile, LondonCryptoClub (@LDNCryptoClub) spotlighted new guidance from UBS global wealth management, which now expects the Federal Reserve to cut rates by 75–100 bps through the remainder of 2025. The analyst writes via X: “This is kind of the key for Bitcoin. If the Fed treats tariff induced inflation as ‘transitory’ [… ] and focuses on supporting growth, then real rates are coming way lower […] and Bitcoin will fly. Financial conditions are currently easing with lower dollar and yields (although keep an eye on credit spreads). […] Bitcoin front runs liquidity […] Ultimately, this all ends with the Fed being forced to be the liquidity providers of last resort […] Bitcoin will end this year significantly higher. Just the path is going to be a very volatile and choppy one.” Macro analyst Alex Krüger (@krugermacro) cautioned about the interplay between monetary easing and recession risk: “Fed cuts without recession are usually bullish. Fed cuts with recession are usually bearish. This was a major talking point in 2024.” Powell’s Speech: A Pivotal Moment In light of President Trump’s unexpected tariffs, Friday’s scheduled remarks by Federal Reserve Chair Jerome Powell have taken on renewed urgency. Powell had previously indicated that monetary policy remains restrictive, given inflation’s persistence above the Fed’s 2% target. Yet tariffs introduce a potential double bind: higher costs for consumers that could drive inflation further, alongside a drag on economic growth that complicates the labor market outlook. Andy Brenner of NatAlliance Securities described the speech as possibly “One of the most important Powell speeches in three years.” The Fed Chair is due to speak at 11:25 am ET. At press time, BTC traded at $83,197. Featured image created with DALL.E, chart from TradingView.com
Crypto markets edged lower Monday following a stark warning from Goldman Sachs, which raised its 12-month US recession probability to 35%, citing rising tariffs, weakening growth, and deteriorating sentiment. The reassessment follows the firm’s second upward revision in March to its 2025 US tariff expectations, signaling an increasingly fraught macroeconomic environment with direct implications for risk assets — including cryptocurrencies. In the note titled “US Economics Analyst: A Further Increase in Our Tariff Assumptions”, Goldman economists Alec Phillips, Tim Walker, and David Mericle outline their rationale: “We now expect the average US tariff rate to rise 15pp in 2025 […] almost the entire revision reflects a more aggressive assumption for ‘reciprocal’ tariffs.” Goldman anticipates that President Trump will announce across-the-board reciprocal tariffs averaging 15% on April 2. Adjusted for product and country exclusions, the effective rise in average tariffs is expected to be around 9 percentage points. Related Reading: Crypto Market Cap Evolution Shows Diverging Trends Among Top Digital Asset The impact on the macro outlook is stark: Goldman has downgraded its 2025 US GDP growth forecast by 0.5pp to 1.0% (Q4/Q4), lifted its year end core PCE inflation forecast to 3.5% (+0.5pp), and increased its unemployment projection to 4.5% (+0.3pp). These revisions reflect a stagnating growth environment paired with inflationary pressures — a combination that constrains monetary stimulus options. The bank attributes the rise in recession probability to three key factors: a lower growth baseline; deteriorating household and business confidence; and “statements from White House officials indicating greater willingness to tolerate near-term economic weakness.” Despite historically poor predictive power from sentiment measures, Goldman writes: “We are less dismissive of the recent decline because economic fundamentals are not as strong as in prior years. Most importantly, real income growth has already slowed sharply and we expect it to average only 1.4% this year.” Implications For Crypto While digital assets have long been viewed as uncorrelated to traditional macroeconomic variables, that narrative has evolved. Bitcoin, in particular, has become increasingly responsive to broader macro conditions — particularly liquidity, risk sentiment, and real yields. Related Reading: Meltem Demirors On Crypto Rally: ‘Are We So Back? Not So Fast’ As the yield curve inverts once again — a classic recession signal — macro analysts are warning of a unique policy dilemma. As @ecoinometrics noted on X: “The yield curve is inverting again, a traditional recession signal. But unlike past cycles, the Fed is unlikely to rush to QE due to inflation concerns. This creates a double challenge for Bitcoin: potential risk-off pressure without the stimulus relief that typically follows. Bitcoin is very much driven by macro these days. It is behaving like a high-beta play on the NASDAQ 100.” However, not everyone agrees that a recession poses a net-negative risk for crypto. In a recent interview, Robbie Mitchnick, Global Head of Digital Assets at BlackRock, offered a nuanced view of Bitcoin’s macro sensitivity: “Economic fears. I mean, I don’t know if we have a recession or not, but a recession would be a big catalyst for Bitcoin […] It’s catalyzed by more fiscal spending and debt and deficit accumulation. That happens in a recession. It’s catalyzed by lower interest rates and monetary stimulus. That tends to happen in a recession.” Mitchnick acknowledges the short-term constraints — the wealth effect, reduced disposable income, and high correlations with equities — but maintains that structurally, Bitcoin benefits from the long-term consequences of recessionary policy responses. “Bitcoin is long liquidity in the system… and to some extent over just fears of general social disorder […] that too, unfortunately, is something that can come up in a recession.” He adds that current market reactions may not reflect Bitcoin’s true positioning: “The market has almost, it seems, gotten this in some ways not particularly well calibrated… but that’s where the opportunity comes in for education in a market and an asset class that’s still very nascent.” At press time, BTC traded at $83,230. Featured image from iStock, chart from TradingView.com
US President Trump’s outspoken acceptance of near-term economic hardship has placed risk assets—including Bitcoin (BTC) and the broader crypto market—under mounting pressure. According to a thread by The Kobeissi Letter on X, President Trump’s strategy revolves around tolerating significant “short term pain” in order to drive down inflation and facilitate the refinancing of over $9 trillion in US debt. Will Crypto Survive Trump’s ‘Short-Term Pain’ Strategy? The impact on cryptocurrencies has been immediate and pronounced. While US equities have shed an estimated $5 trillion in market value this year, digital assets have also suffered steep losses. Since President Trump’s inauguration on January 21, Bitcoin (BTC) has declined by approximately -23%, Ethereum (ETH) has tumbled by roughly -43% and the broader crypto market has experienced even more dramatic price drops. Related Reading: Crypto Bull Run Isn’t Over—It’s Just Changing, Says Analyst Although high volatility is nothing new in crypto, the synchronized downturn suggests that crypto assets are not immune to macroeconomic forces. The Kobeissi Letter adds, “Based on our research, President Trump made this conclusion BEFORE inauguration. However, he began formally articulating it on March 6th. Below is the headline that destroyed investor confidence in 2025. President Trump is no longer the ‘stock market’s President’ (for now).” The Kobeissi Letter points to March 9 as the date President Trump further confirmed his stance by noting that America is in a “period of transition” and that it will “take a little time,” implying a willingness to tolerate near-term market turbulence. During this period, Commerce Secretary Lutnick’s statement on March 6—“Stock market not driving outcomes for this admin”—was followed by Treasury Secretary Bessent’s remark, “Not concerned about a little volatility.” Although The Kobeissi Letter’s analysis notes that the administration’s viewpoint solidified before inauguration, it cites President Trump’s urgent focus on the year 2025, when $9.2 trillion in US debt will either mature or need to be refinanced. The thread states, “First, as we have previously noted, the US is facing a massive refinancing task. In 2025, $9.2 TRILLION of US debt will either mature or need to be refinanced. The quickest way to LOWER rates ahead of this colossal refinancing would be a recession.” Related Reading: Economic Turmoil: Crypto Market Loses 25% Of Value As Recession Worries Mount Beyond debt concerns, The Kobeissi Letter also highlights the administration’s drive to reduce oil prices and the US trade deficit as part of the same economic calculation. Since President Trump took office, oil has fallen by over 20%. “Furthermore, a clearly defined part of President Trump’s strategy has been to LOWER oil prices. Oil prices are down 20%+ since Trump took office. This morning, Citigroup said oil prices falling to $53 would lower inflation to 2%. What would lower oil prices? A recession.” Meanwhile, the administration’s extensive use of tariffs, which The Kobeissi Letter describes as “levying tariffs on almost ALL US trade partners,” is chipping away at GDP growth estimates, further hinting that a deliberate slowdown is in motion. The Kobeissi Letter also notes, “On top of this, DOGE and Trump are attempting to cut TONS of government jobs. These are the same jobs that have accounted for much of the recent job ‘growth’ in the US. Government jobs have risen by 2 million over the last 4.5 years. Cutting these jobs will spur a recession.” DOGE leader Elon Musk appears resigned to short-term declines. Even after Tesla (TSLA) recorded its seventh-largest historical drop on March 10, Musk posted that “It will be fine long-term.” For crypto traders and investors, the “short term pain” scenario by Trump is currently dictating the price action. The question, the analysts from The Kobeissi Letter posit, is whether this will lead to a more favorable economic landscape in the long run. “Is the ‘short term pain’ worth the ‘long term gain’ in President Trump’s economic strategy?”. At press time, the BTC price remained under heavy downward pressure and traded at $82,000. Featured image from Shutterstock, chart from TradingView.com
The 2024 US presidential election is decided. Donald Trump will get a second term, defeating Kamala Harris. In the midst of election night, the Bitcoin price rose to a new all-time high of $75,407 on Binance. The euphoria is driven by Trump’s big election promises. He wants to establish Bitcoin as a national strategic stockpile, fire Securities and Exchange Commission (SEC) Chairman Gary Gensler and generally enforce a crypto-friendly policy. While a Harris victory would have meant a short-term setback for Bitcoin according to most experts, the predictions by the majority of experts are extremely bullish thanks to the Trump victory. However, renowned economist Henrik Zeberg offers a cautionary perspective. Zeberg warns that Trump’s proposed economic policies could precipitate a US recession, leading to a “blow-off top” scenario for Bitcoin and the broader crypto market. Central to his argument is Trump’s plan to replace certain taxes with tariffs to stimulate domestic economic growth. Is A Bitcoin Blow-Off Top Scenario Looming? Drawing parallels with historical events, Zeberg suggests that Trump’s tariff strategy could echo the economic missteps of the 1920s and 1930s. In a post on X, he shared a link to the Wikipedia page for the Smoot-Hawley Tariff Act of 1930. He stated: “Now everything is lined up for history to repeat itself. US Tariffs implemented into a Recession—reinforcing the downturn and popping the Greatest Bubble ever.” Related Reading: Analyst Reveals What The Gold Chart Says About The Possibility Of Bitcoin Price Reaching $100,000 The Smoot-Hawley Tariff Act is widely regarded as a catalyst that deepened the Great Depression. By substantially increasing US tariffs on imported goods, the act prompted retaliatory tariffs from other nations, leading to a severe contraction in international trade. This protectionist spiral exacerbated global economic decline, resulting in heightened unemployment and prolonged hardship worldwide. Amid these economic concerns, Zeberg has projected a significant, yet potentially short-lived, surge in Bitcoin’s price. “Making it Simple! BTC target 115-123K,” he asserted via X a few days ago. His analysis is grounded in Fibonacci extension levels—a technical analysis tool used to predict future price movements based on historical price patterns. Related Reading: Institutional Traders Bet On Bitcoin Exceeding $79,300 By End Of November According to Zeberg’s analysis, the critical level to monitor is the 1.618 Fibonacci extension, calculated at $114,916.16. He suggests that this level is “very likely the top,” indicating that Bitcoin could reach this price point before experiencing a significant reversal. The analysis also notes other key Fibonacci levels that may serve as resistance points during Bitcoin’s ascent. The 0.382 level at $77,437.88 marks a significant initial resistance following the breakout from the previous all-time high. The 0.618 level at $85,205.47 could act as minor resistance as the price climbs. Additionally, the 1.0 level at $107,435.71 represents a crucial psychological and technical threshold, while the 1.27 level at $123,148.19 indicates a possible overshoot beyond the primary target zone. An annotation on Zeberg’s chart poses the question, “58% in less than 3 months into the top?” This suggests he anticipates a rapid price increase within a relatively short time frame, consistent with historical patterns. At press time, BTC traded at $73,742. Featured image created with DALL.E, chart from TradingView.com
Henrik Zeberg, Head Macro Economist at Swissblock, has reasserted his prediction that a US recession is inevitable, but not before a dramatic upswing in financial markets, including a substantial rally for Bitcoin to heights between $115,000 and $120,000. In his most recent analysis posted on X, Zeberg expounded upon the cyclical nature of markets and how they align with historical economic indicators and current fiscal policies. “REMEMBER!? In December 2022, everybody was BEARISH! I was BULLISH! We were told that ‘Imminent Crash’ was ahead of us – despite the fact that the market bottomed in October 2022,” Zeberg reiterated in his post. He laid out his refined predictions for major market indices and Bitcoin, pointing to a forthcoming “Blow Off Top”. Bitcoin Faces Its First Recession Ever A “blow-off top” refers to a sharp, rapid increase in the price in financial markets, followed by an equally sharp decline. This pattern is characterized by intense buying pressure that drives prices to extreme highs, often driven by speculative or euphoric behavior among traders. This surge in prices is usually unsustainable, leading to a significant sell-off as traders take profits or react to overbought conditions. Related Reading: These Are The Biggest Bitcoin Support & Resistance Zones, Analyst Reveals The blow of the top predicted by Zeberg could be triggered by the US Federal Reserve injecting massive amounts of liquidity into circulation to prevent a recession. Based on this, Zeberg forecast that the S&P 500 will rise to 6,100-6,300, the Nasdaq to 24,000-25,000, the Dow Jones Industrial Average to roughly 45,000, and Bitcoin to $115,000-120,000. Zeberg’s bullish stance contrasts starkly with his dire prediction for the post-rally period. “Now….. we are not at the top – yet! But Recession IS coming – and it will be the worst since 1929. Major Bear market (in 2 phases; Deflationary and Stagflationary – separated by a mid-way bounce as Fed enters in 2025),” he explained, suggesting a complex recessionary cycle influenced by both market dynamics and Federal Reserve (Fed) policies. The economist’s skepticism toward the effectiveness of impending Federal Reserve rate cuts is rooted in a detailed critique of similar historical measures. Despite the market’s expectation of a 25 basis points cut at the next FOMC meeting in September—a move supported by 73.5% of market participants (according to the CME FedWatch tool), with a smaller fraction (26.5%) anticipating a more aggressive 50 basis points cut—Zeberg remains unconvinced these will forestall recessionary pressures. Related Reading: September 10: A Bitcoin Game Changer, Says Hedge Fund Founder “But… but… Fed rate cuts…. ?? The Global Economy is breaking. US Recession begins December 2024,” Zeberg stated, reflecting his belief that short-term liquidity injections are insufficient to counteract deeper economic malaises. He points to the liquidity cycle metrics comparable to those seen in 2007, questioning the effectiveness of such strategies in preventing the 2008 financial crisis. Furthermore, Zeberg highlights the recent end of the inversion between the US. 2-year and 10-year Treasury yields, traditionally viewed as a predictor of economic downturns. The inversion, where short-term yields exceed long-term yields, is typically a signal of investor uncertainty about the near-term economic outlook. Another pillar of Zeberg’s argument is the recent job market data. The US Bureau of Labor Statistics revised its March 2024 total employment estimates downward by 818,000—the largest revision in 15 years—indicating significant weakness in the job market, far more pronounced than initial estimates suggested. “Economy much weaker than expected,” Zeberg commented. At press time, Bitcoin traded at $60,764. Featured image created with DALL.E, chart from TradingView.com
The bullish outlook appears despite the ongoing Bitcoin sell-off, which is being led by the growing risks of a recession in the United States.