Although the cryptocurrency market is often expected to be a ‘defensive asset’ amid instability, if an economic recession occurs too quickly – within just 3 to 6 months – as warned by 62% of CEOs in the U.S., even Bitcoin may struggle to escape negative repercussions.



The main reason cited by business leaders is the instability of tax policies and the severe volatility of global financial markets. Although the U.S. has temporarily postponed additional tariffs for 90 days, economists remain skeptical about the effectiveness of this measure. They believe the consequences of high inflation, import taxes, and geopolitical risks will continue to haunt the U.S. economy for a long time.



Major figures like Ray Dalio and Jamie Dimon also do not hide their concerns about systemic risks that could lead to a widespread financial crisis. And if that happens in the short term without enough time for the market to adapt, cryptocurrencies could become one of the first victims.



Contrary to the common belief that Bitcoin and crypto are safe havens, the reality shows that in free-falling market periods, investors often prioritize liquidity. At that time, risk assets – including Bitcoin, Ethereum, and altcoins – will be sold off to hold cash, gold, or government bonds. This is exactly what happened during the crash in early March 2020, when both stocks and Bitcoin plummeted.



Notably, unlike in 2020 – when the FED and global central banks aggressively pumped money to save the markets – 2025 is witnessing a high interest rate environment and limited policy space. If the upcoming recession hits too abruptly, authorities may not respond in time, leading to a rapid and severe capital flight from risk assets.



In that scenario, the cryptocurrency market would not only face a sharp price decline but could also suffer from a loss of confidence – a critical factor for a nascent market. Weak projects, those with low liquidity, or reliant on speculative capital may collapse en masse, causing a domino effect similar to what occurred after the Terra-LUNA and FTX events.



In summary, while crypto still has long-term potential, if a global economic recession arrives too quickly and without a strong enough policy response, this will be a harsh test for the entire digital asset industry.



Note: Investing in cryptocurrencies always carries high risks and is not suitable for everyone. Investors need to closely monitor macroeconomic developments and carefully allocate their assets. #anhbacong