Bitcoin has often been considered a hedge against inflation and economic downturns. BlackRock’s digital assets head, Robbie Mitchnick, believes BTC could benefit if the U.S. enters a recession.
He pointed to monetary stimulus, lower interest rates, and fiscal spending as key drivers. Meanwhile, analysts remain divided on Bitcoin’s future, with some forecasting a major rally and others warning of a steep decline.
Bitcoin’s Potential Role in a Recession
Mitchnick stated that Bitcoin might thrive if the U.S. economy slows. He noted that recessions typically lead to increased government spending, growing deficits, and lower interest rates. These factors, he explained, tend to drive demand for alternative assets, including Bitcoin.
He acknowledged that many investors still see Bitcoin as a risky asset. However, he suggested that market perceptions could shift over time. In September, he argued that Bitcoin was often mislabeled, and its classification in financial markets was still evolving.
Market Outlook and Analyst Predictions
Bitcoin recently surged nearly 2% and is trading at $85,326.84. However, it remains 21% below its peak of $109,114.88 from earlier this year. Investors closely monitor the Federal Reserve’s next moves, as its policies could significantly impact Bitcoin.
Michael van de Poppe, a crypto analyst from Amsterdam, believes BTC could rise sharply if the Fed signals a pause in rate hikes or hints at cuts in the next few months. He explained that lower interest rates push investors toward riskier assets, including cryptocurrencies.
Conversely, Bloomberg Intelligence’s Mike McGlone warned that Bitcoin could drop as low as $10,000. He compared Bitcoin’s recent rally to the early 2000s tech bubble and suggested that market conditions could lead to a major downturn. He also noted that investors have been shifting funds from Bitcoin ETFs to Gold ETFs, indicating weakening confidence in crypto.
