Bitwise Predicts: US Recession May Fuel Bitcoin’s Next Surge

Wall Street’s favorite hedge—gold—might get some digital competition. As the US economy shows cracks, Bitwise analysts argue Bitcoin could become the recession-era safe haven for the algorithmic age.

Why? When traditional markets tank, investors hunt for uncorrelated assets. Bitcoin’s 14-year track record of ignoring macro trends (and central bankers) makes it a tempting hedge—assuming you can stomach the volatility.

Of course, the same institutions warning about recession risks are the ones still charging 2% management fees on underperforming bond portfolios. Maybe decentralization’s real appeal is cutting out the middlemen when the system fails.

In brief

• The American economy contracted by 0.3% in the first quarter of 2025, fueling recession fears.
• Markets now anticipate rate cuts by the Fed as early as July, with a probability of 58%.
• The US dollar (DXY) has lost 8.3% since the beginning of the year, despite a slight rebound on Wednesday.
• Bitcoin shows signs of decoupling from equity markets, moving closer to gold.

A recession that changes the game for Bitcoin

For the first time in three years, the American economy contracted in the first quarter of 2025, showing a decline of 0.3% on an annualized basis.

This announcement from the Bureau of Economic Analysis triggered a temporary drop in the Bitcoin price to $93,300 this Wednesday, reflecting the initial concern of investors.

André Dragosch, analyst at Bitwise, sees a favorable reversal in this situation: “What was initially bearish for bitcoin is now turning into a tailwind“, he stated to Decrypt. According to him, the crypto bull market should continue despite the economic turbulence.

This outlook relies on a radical change in market expectations. While tariffs imposed by President Trump initially raised fears of prolonged high rates, operators now anticipate the opposite: accelerated rate cuts to support a struggling economy.

A strategic decoupling from the dollar

Traders now consider it likely (58% chance) that the Fed will lower its key rate to a range of 3.75-4% as early as July, representing two consecutive cuts of a quarter point. This prospect of increased liquidity and cheaper borrowing traditionally favors risky assets.

However, bitcoin presents a particular advantage compared to stocks in this context. “It is an asset disconnected from the system“, explains Dragosch, emphasizing that unlike companies, crypto is not faced with the same valuation challenges during a recession.

Even more significantly, bitcoin shows signs of decoupling from US stocks, moving more in parallel with gold. This dynamic is part of a broader context of dedollarization, where the US dollar index has fallen 8.3% since January.

Bitcoin tends to have a strong inverse sensitivity to the dollar. If a structural depreciation of the dollar is anticipated, bitcoin could constitute an ideal hedge.

In this context of American economic fragility, bitcoin, currently around $94,000, could therefore find in the recession an unexpected ally, reinforced by its emerging status as a SAFE haven and initiatives like Arizona, which is considering making it a strategic state reserve.

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