Bitcoin Poised for Potential Gains Amid US Economic Slowdown
As the U.S. economy shows signs of entering a recession, Bitcoin is increasingly seen as a potential beneficiary, with expectations that it may serve as a safe-haven asset, similar to gold.
According to CoinTelegraph, U.S. GDP contracted by 0.3% in Q1 2025, marking the first negative growth since Q2 2022, and surprising markets that expected a 0.3% increase. Personal Consumption Expenditure (PCE) also exceeded expectations, rising 1.8%, while core PCE climbed 3.5%, indicating ongoing inflationary pressure.
This has led to growing concerns about ‘stagflation’—the combination of economic stagnation and inflation. The Federal Reserve now faces a difficult choice between cutting interest rates to avoid further economic contraction and rising unemployment, or maintaining rates to control inflation.
As a result, the market now sees a 63% chance of a 0.25% rate cut by the Fed in June, up from a mere 3% chance for May. The prospect of a potential rate cut and continued market volatility highlights Bitcoin’s emerging role as a store of value.
Meanwhile, prediction markets like Kalshi and Polymarket are reflecting a high probability of a U.S. recession by 2025, with chances at 74% and 70%, respectively. Despite short-term price fluctuations, a 'buy the dip' strategy is gaining traction as liquidity increases and risk sentiment recovers.
