Crypto Markets React to U.S. Economic Contraction Concerns

Crypto Markets React to U.S. Economic Contraction Concerns

The U.S. economic downturn has fueled concerns of a recession, leading crypto prediction markets to predict higher odds of an economic contraction in 2025.

The U.S. economy’s decline of 0.3% in 2025 has impacted crypto prediction markets , elevating recession odds. Platforms like Polymarket report a 66% probability of a recession, reflecting economic unease. Experts see Fed policy adjustments on the horizon.

Prominent trader Michaël van de Poppe noted, “The rumors for a potential recession is increasing.” Fed rate cuts are expected, indicated by CME Group’s data, showing a 63% probability of a cut in June’s FOMC meeting.

Prediction markets show active engagement, with over $3.8 million traded on recession bets at Polymarket. Kalshi reported recession odds peaking at 74% before retracting slightly. Economic data shifts continue to influence market sentiment.

With potential rate cuts on the table, cryptocurrency markets look towards stability. Market analysts foresee different outcomes: Bitcoin may surpass $70,000 in a bull scenario or fall to $58,000 amidst unforeseen macro events.

Federal policies are under scrutiny as challenging economic conditions persist. Daniel Goldman, a U.S. lawmaker, criticized trade policies, hinting at possible impacts on the broader economy and crypto configurations.

Historically, crypto assets exhibit sensitivity to macroeconomic factors, with current adjustments driven by GDP statistics. Such trends may predict outcomes affecting financial, regulatory, and technological sectors.

“The rumour for a potential recession is increasing, which should strengthen the thesis for the FED to loosen up the policy. That will likely be a low on the markets, liquidity to be added and risk-on to thrive.” – Michaël van de Poppe