Analyst Predicts Economic Uncertainty and Crypto Market Struggles
The United States faces a 40% probability of entering a recession in 2025, driven by concerns over a prolonged trade war and ongoing macroeconomic instability, according to market analyst and Coin Bureau founder Nic Puckrin. While a downturn is not guaranteed, the heightened uncertainty could create challenges for risk-on assets such as cryptocurrencies.
Speaking in a recent interview, Puckrin noted that while a recession remains uncertain, its likelihood has increased significantly. He pointed out that former U.S. President Donald Trump and his advisors have acknowledged the possibility, though it is not yet a definitive scenario.
“Trump and his advisors have said they have not completely dismissed the recession, which means it is definitely possible. But right now, I would not say it is probable, though the odds have climbed a lot,” Puckrin stated.
He added that while Trump is not deliberately attempting to induce a recession, his administration’s policies—such as cutting federal jobs and reducing spending to balance the budget—could inadvertently trigger one. Such measures, historically, have contributed to economic contractions.
Macroeconomic Uncertainty and Market Shifts
A key factor influencing the economy and financial markets is the declining strength of the US Dollar Index (DXY). Macroeconomic uncertainty has led investors to reallocate capital to European markets, seeking safer opportunities amid growing instability in the U.S.
The price of Bitcoin has been struggling amid the trade war headlines and is currently trading below its 200-day exponential moving average (EMA). Source: TradingView
Puckrin also anticipates that the Federal Reserve will implement two 25-basis-point interest rate cuts in 2025 but will refrain from quantitative easing. This approach could further impact investor sentiment and financial markets.
Trade War Fears Weigh on Crypto Markets
The escalation of trade tensions under Trump’s administration has had a notable impact on the cryptocurrency sector. Tariffs imposed on U.S. trading partners sent shockwaves through crypto markets, causing a sharp decline in altcoin prices and a significant correction in Bitcoin’s value.
Bitcoin (BTC) saw a 24% decline from its January 20 peak of over $109,000, as market sentiment shifted towards extreme fear. This marks a stark contrast to the euphoria that followed Trump’s re-election in November 2025 and his inauguration in January.
According to Nansen research analyst Nicolai Sondergaard, the crypto market is likely to remain under pressure from tariff-related fears until at least April 2025. He suggested that market conditions could improve if the U.S. administration negotiates an end to the tariffs or adopts a softer stance.
Potential for Market Recovery
Despite current challenges, there are signs of potential recovery in the crypto space. Markus Thielen, founder of 10x Research, noted that Bitcoin formed a price bottom in March 2025. This development coincided with Trump’s administration appearing to ease its rhetoric on trade tariffs, which could signal an upcoming price reversal for cryptocurrencies.
While the outlook remains uncertain, analysts agree that macroeconomic developments and trade policies will play a crucial role in shaping the financial and cryptocurrency markets throughout 2025.
