On May 15, revised data from the US Bureau of Economic Analysis (BEA) officially confirmed: the US economy contracted by 0.2% in Q1 2025, on an annualized basis. This marks the first GDP contraction since 2022, signaling a turning point after several consecutive quarters of growth. However, despite this negative signal, Bitcoin and the cryptocurrency market have hardly reacted.
Reasons for the decline: Decreased spending, increased imports, and the 'aftereffects' of the trade war
According to the report, the main reasons for the decline in US GDP include:
Government spending has decreased significantly,
Imports have surged, resulting in a trade balance deficit,
And domestic consumption has weakened compared to Q4 2024 – which previously recorded a growth of 2.4%.
In particular, this decline is believed to be a direct consequence of the global trade war initiated by President Trump, with tariffs of up to 104% applied to over 180 countries, including major partners such as #china , the UK, and the EU.
Although tensions have recently eased following US-China agreements and extended negotiations with the EU, the economic impacts have yet to be fully erased.
Crypto market: 'Calm as a millpond'
In contrast to traditional financial markets that often react strongly during economic downturns, Bitcoin has remained stable, while Ethereum increased slightly by 1.1%. Some minor fluctuations were also noted among the top coins:
Solana decreased by 1.3%,
XRP decreased by 0.4%.
Notably, the two most volatile names are meme coins:
SPX6900 (SPX) increased by 10.9%,
While Fartcoin (FARTCOIN) decreased by 7%.
Nevertheless, these numbers are still considered "calm" for the notoriously volatile capital markets like crypto.
USDX has not yet escaped the range bound
According to data from #FXCE , the strength index of the US dollar (USDX) has remained stable in the range of 102 – 97.9 since April 10, 2025, indicating that market sentiment has not clearly tilted towards either an upward or downward trend despite signs of economic recession. This further reinforces why Bitcoin and digital assets have not reacted strongly to GDP news.
Related to the crypto market
The fact that Bitcoin has not reacted to negative economic data could indicate two things:
Macroeconomic factors have been "priced in" by the market, and the figure of -0.2% did not come as a surprise.
The influence of crypto is becoming increasingly independent from traditional fluctuations, especially as more investors believe in the long-term safe-haven role of Bitcoin.
However, this calmness may be temporary. If Q2 data continues to worsen, or the trade war escalates again, the likelihood of the crypto market reacting more clearly cannot be ruled out.
Warning: The cryptocurrency market always carries high risks and is not suitable for everyone. Investors need to conduct thorough research and should not use all their assets for investment. #anhbacong