Analysts Predict Higher Recession Odds, Impacting Crypto Market
Wall Street analysts are now forecasting a higher chance of a recession. This could influence the performance of Bitcoin and altcoins like Shiba Inu, Dogecoin, Ripple, and Cardano.
PIMCO and JPMorgan analysts have raised their recession odds to 35% and 40%, respectively. Goldman Sachs estimates a 20% chance. These predictions are based on falling consumer confidence, reduced government spending, and trade tensions.
A recession is marked by two consecutive quarters of negative economic growth. The Atlanta Fed predicts a 2.4% contraction this quarter. During a recession, unemployment rises, productivity weakens, and consumer confidence drops.
Though,bitcoin and altcoins might perform well during a recession. The Federal Reserve could cut interest rates and restart quantitative easing (QE). QE involves creating money to buy assets, boosting market liquidity.
Historically, risky assets like cryptocurrencies have thrived when the Fed increases liquidity. For instance, Bitcoin’s price surged after the COVID-19 pandemic.
There’s a growing chance of more Fed rate cuts this year. Recent data shows U.S. inflation at 2.8% in February. The U.S. dollar index and bond yields have also declined.
Altcoins like SHIB, DOGE, XRP, and ADA have fallen substantially in recent months. Shiba Inu’s price has dropped by nearly 70% this year. These coins could benefit from potential Fed rate cuts and other events.
Donald Trump has proposed a Strategic Bitcoin Reserve. The SEC has also dropped crypto lawsuits and may approve altcoin etfs later this year. These factors could boost Bitcoin and altcoin prices.
