Bitcoin Prices in Recession Fears, but Downside Risk Remains: Bitwise

However, there remains a possibility of further declines if the recession actually unfolds. In a recent report , analysts from crypto management firm Bitwise pointed to Bitcoin’s mixed performance during previous recessions. As cited in the report, during the 2020 COVID-19 recession, Bitcoin saw an initial drop of over 50%, only to rebound and end the year with an impressive 300% gain.

The analysts also suggested that “it is quite likely” that Bitcoin will continue to face pressure if the equity market remains in decline. So far, Bitcoin has experienced a 27% drop from its peak, which indicates that much of the recession-related concerns may already be priced into the asset.

As the analysts at Bitwise pointed out,

“The key takeaway here is that U.S. recession fears are already being priced into bitcoin and other cryptoassets as we speak, but there might still be a little bit more downside left if a U.S. recession actually materializes.”

This highlights the ongoing uncertainty but also suggests that the market has largely absorbed these fears.

Adding to this sense of uncertainty, analysts have noted signs of “peak uncertainty,” with U.S. economic policy uncertainty currently mirroring the levels seen during the Covid crisis. Additionally, Google search trends for the term “recession” are at levels comparable to those during the pandemic, further amplifying the prevailing concerns.

As analysts from QCP Capital pointed out in a recent Telegram post , markets are now focusing on President Donald Trump’s upcoming “Liberation Day” announcement scheduled for April 2. During this event, Trump is expected to introduce new reciprocal tariffs, which could add fuel to existing economic tensions. With consumer confidence already at a 12-year low and equities facing a 4-5% weekly drawdown, the analysts warn that aggressive trade policies could heighten recession fears and exert additional pressure on risk assets, including Bitcoin.

Meanwhile, Matt Hougan, Chief Investment Officer at Bitwise, remains sceptical about traditional financial institutions successfully entering the stablecoin market. In a recent post on X, Hougan expressed doubts about major banks’ ability to capture a significant share of this rapidly evolving sector.

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