The United States faces a 40% probability of entering a recession in 2025 due to macroeconomic uncertainty and the possibility of a prolonged trade war, according to Coin Bureau founder Nic Puckrin. While a recession is not yet considered likely, growing economic instability is creating a challenging environment for risk-on assets, including cryptocurrencies.
Economic Uncertainty and Federal Reserve Policy
In an interview, Puckrin predicted that the Federal Reserve would introduce two 25 basis point rate cuts in 2025 but would avoid implementing quantitative easing. He highlighted that while former US President Donald Trump and his advisors have not ruled out the possibility of a recession, they are not actively trying to trigger one. However, budget-balancing measures such as federal job cuts and reduced government spending could lead to economic downturns as an unintended consequence.
The analyst also noted that concerns over economic stability have contributed to a recent decline in the US Dollar Index (DXY). Investors are shifting capital towards European markets and other regions that offer a safer investment climate amid ongoing uncertainty in the US.
Trade War Fears and Bitcoin’s Decline
Market sentiment in the cryptocurrency sector has turned bearish following new tariffs imposed by President Trump on key US trading partners. These tariffs have triggered a downturn in altcoin prices and led to a significant correction in Bitcoin’s value. The leading cryptocurrency saw a 24% drop from its January 20 high of over $109,000, marking a sharp reversal from the optimism that followed Trump’s re-election in November 2025.
According to Nansen research analyst Nicolai Sondergaard, crypto markets are likely to remain under pressure until at least April 2025. He suggests that if the US and its trading partners reach a resolution on tariffs or if the Trump administration eases its stance, the market could begin to recover.
Potential Market Rebound
Despite the current downturn, there are signs that a market rebound may be on the horizon. Markus Thielen, founder of 10x Research, noted that Bitcoin may have already found a price bottom in March 2025. He attributes this potential reversal to President Trump softening his rhetoric around trade tariffs, which could lead to renewed investor confidence in crypto markets.
While economic uncertainty remains a concern, crypto investors are closely monitoring policy changes and trade negotiations. A resolution to ongoing trade disputes and a more accommodative economic policy from the Federal Reserve could provide the catalyst for a market resurgence later in the year.
