In light of the contraction of the U.S. economy, bitcoin could paradoxically benefit, according to André Dragosch, European research lead at Bitwise. This perspective is explained by the anticipation of interest rate cuts and the weakening of the dollar, two factors particularly favorable for crypto.
In short.
The U.S. economy contracted by 0.3% in the first quarter of 2025, fueling recession fears.
Markets are now anticipating rate cuts by the Fed starting in July, with a 58% probability.
The U.S. dollar (DXY) has lost 8.3% since the beginning of the year, despite a slight rebound on Wednesday.
Bitcoin shows signs of decoupling from stock markets, moving closer to gold.
A recession that changes the game for Bitcoin.
For the first time in three years, the U.S. economy contracted in the first quarter of 2025, showing a 0.3% annualized decline.
This announcement from the Bureau of Economic Analysis triggered a temporary drop in the bitcoin price to $93,300 this Wednesday, reflecting the initial unease of investors.
André Dragosch, an analyst at Bitwise, sees a favorable turn in this situation: "What was initially bearish for bitcoin is now turning into a tailwind," he told Decrypt. According to him, the crypto bull market will continue despite economic turbulence.
This perspective is based on a radical change in market expectations. While the tariffs imposed by President Trump initially generated fears of a prolonged persistence of high rates, traders now expect the opposite: accelerated rate cuts to support a struggling economy.
A strategic decoupling from the dollar.
Traders now consider it likely (58% probability) that the Fed will reduce its interest rate to a range of 3.75-4% starting in July, which would entail two consecutive quarter-point cuts. This prospect of greater liquidity and lower borrowing costs traditionally favors risky assets.
However, bitcoin presents a particular advantage over stocks in this context. "It is an asset disconnected from the system," explains Dragosch, noting that unlike companies, crypto does not face the same valuation challenges in times of recession.
Even more significantly, bitcoin shows signs of decoupling from U.S. stocks, evolving more in parallel with gold. This dynamic is framed within a broader context of dedollarization, where the U.S. 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 U.S. economic fragility, bitcoin, currently around $94,000, could find an unexpected ally in the recession, bolstered by its emerging status as a safe haven and by initiatives like Arizona's, which plans to make it a state strategic reserve.
