Crypto Market Shows Signs of Recovery Amid Recession Fears
The crypto market has seen a slight recovery this week, with the total market cap nearing $3 trillion. Bitcoin (BTC) has held steady above $86,000, while meme coins like Pepe (PEPE), Shiba inu (SHIB), and Floki (FLOKI) have surged by double digits.
Tho, economic concerns loom. Mark Zandi, Chief Economist at Moody’s, has warned of a potential recession. In a post on X, Zandi noted that his top recession indicator is “flashing bright yellow,” suggesting a possible downturn in 2025.He pointed to a significant drop in consumer confidence, down 17 points over the past three months.
Zandi’s primary recession indicator is a 20-point drop in confidence over three months. When this happens, consumers tend to cut back on spending, leading to a recession. A technical recession occurs when the economy contracts for two consecutive quarters.
- Consumer confidence down 17 points in three months.
- Zandi’s top recession indicator is nearing a critical threshold.
Interestingly, history shows that risky assets like Bitcoin and altcoins can perform well during economic downturns. After the 2008 financial crisis, US stocks enjoyed a decade-long bull run. Similarly, Bitcoin rose from $4,000 in March 2020 to $69,000 in November 2021.
This rebound was fueled by the Federal Reserve’s interventions, such as rate cuts and quantitative easing.If a recession occurs, as Zandi predicts, Bitcoin and altcoins may benefit from the Fed’s supportive monetary policies.
Even if a recession is avoided, Bitcoin and altcoins could still thrive. Ending or scaling back tariffs could boost investor confidence in risky assets.
