Goldman Sachs Raises US Recession Probability to 35% Affecting Crypto Markets
Crypto markets declined following a warning from Goldman Sachs, which raised the 12-month US recession probability to 35% due to increasing tariffs, weakening growth, and deteriorating sentiment. The bank revised its 2025 tariff expectations, anticipating a 15 percentage point rise in average US tariffs.
Key points from Goldman Sachs' analysis:
- 2025 GDP growth forecast downgraded to 1.0%
- Core PCE inflation forecast raised to 3.5%
- Unemployment projection increased to 4.5%
- Factors raising recession probability: lower growth baseline, declining confidence, and government willingness to accept economic weakness
- Real income growth expected to average only 1.4% this year
Implications For Crypto
Bitcoin has shown increased sensitivity to macroeconomic conditions, particularly liquidity and risk sentiment. Analysts noted that the yield curve is inverting, signaling a potential recession without immediate quantitative easing from the Fed due to inflation concerns. This may create challenges for Bitcoin as it aligns more closely with traditional equities.
Robbie Mitchnick from BlackRock expressed that a recession could be a catalyst for Bitcoin due to anticipated fiscal spending and lower interest rates, despite short-term constraints like reduced disposable income. He highlighted that Bitcoin benefits from long-term recessionary policies focused on liquidity.
Current BTC price stands at $83,230.
