Ahmet Bedirhan Arvas 
The U.S. economy is entering a critical phase due to global uncertainties, trade wars, and fluctuations in interest rate policies. The likelihood of a recession in 2025 is becoming an increasingly debated topic. Coin Bureau founder Nic Puckrin estimates the probability of a U.S. recession in 2025 at 40%, predicting that the Federal Reserve (Fed) will implement two 25-basis-point rate cuts but will not pursue monetary expansion.
The possibility of a recession not only impacts the U.S. economy but could also directly affect Bitcoin and the altcoin markets. During periods of global economic uncertainty, there is a tendency to move away from riskier assets, making the future trajectory of the crypto markets a crucial point of discussion.
Will There Be a Recession in the US in 2025?
Macroeconomic indicators suggest that the U.S. economy is beginning to slow down. Trade wars, inflationary pressures, and weakening global economic growth are among the key factors increasing the likelihood of a recession in 2025. When several of these factors converge, the probability of a U.S. recession in 2025 rises to around 40%.
Economists highlight the following factors contributing to the risk of a recession:
- Trade wars: U.S. tariffs on major trade partners, particularly China, pose a threat to global economic growth.
- Fed’s interest rate policies: While high interest rates in 2024 slowed economic growth, expected rate cuts in 2025 may not lead to an immediate recovery.
- Weakening U.S. Dollar Index (DXY): A decline in the dollar’s value could drive investors toward alternative assets.
- Cuts in public spending: The Trump administration plans to reduce federal expenditures, which could negatively impact economic growth.
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How Do Trade Wars Affect Recessions?
Trade tensions between the U.S. and China pose a significant risk to crypto markets. Historically, trade wars have increased uncertainty in global markets, driving investors toward safe-haven assets.
How Do Trade Wars Affect the Crypto Market?
Negative Impacts:
- Sudden fluctuations in Bitcoin prices: Sharp changes in U.S. trade policies can trigger major price movements in the market.
- Weakening altcoin markets: As riskier assets, altcoins may lose value if investors adopt a risk-averse stance.
- Increased demand for stablecoins: Investors may turn to stablecoins like Tether (USDT) and USD Coin (USDC) as a store of value during periods of uncertainty.
Positive Impacts:
- Bitcoin’s role as digital gold could strengthen: If investors lose confidence in the U.S. dollar, Bitcoin may see increased demand as a store of value.
- A weaker dollar could drive new capital into crypto markets: If the U.S. Dollar Index (DXY) declines, investors might shift toward assets like Bitcoin and Ethereum.
Nansen research analyst Nicolai Sondergaard predicts that market pressure from trade wars will persist until at least April 2025. However, if tariffs are lifted or the Trump administration softens its policies, markets could regain momentum.
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