David Edwards
Bitcoin’s trajectory toward reclaiming its all-time high may be derailed by escalating recession concerns—particularly as US-China tariff negotiations begin in May. Analysts caution that without progress on trade discussions, macroeconomic headwinds could deliver a significant blow to risk-on assets, including Bitcoin.
Samantha LaDuc, a cross-asset strategist at Apollo Global Management, cited the firm’s latest projections predicting a recession by mid-2025, noting the “sharpest decline in earnings outlook since 2020.” Her April 26 post on X flagged that appetite for risk assets is already eroding.
Aurelie Barthere, principal research analyst at Nansen, emphasized the geopolitical implications, suggesting May could be a “pivotal month” due to the expiration of US tariff exemptions on goods like auto parts and sub-$800 shipments from China and Hong Kong. “The absence of progress in negotiations could result in a recession and double-digit losses for Bitcoin,” Barthere told Cointelegraph.
However, Barthere believes a breakdown in trade relations is improbable. “Neither China nor the US has an economic incentive to disrupt bilateral trade,” she said, predicting a likely compromise involving a 10% reciprocal tariff baseline. Should talks advance or result in tentative agreements, Bitcoin could rally back toward its peak, she added.
Reuters, citing Chinese state media, reported on May 1 that the United States has reached out to Chinese officials through multiple diplomatic channels to signal its readiness for tariff dialogue.
Bitcoin’s Potential Resilience in a Recession
Despite the macroeconomic uncertainty, some experts believe Bitcoin could perform robustly even in a downturn. Anndy Lian, intergovernmental blockchain advisor and author, argued that Bitcoin’s historical role as an inflation hedge could reemerge in a stagflationary environment.
“While Bitcoin may initially sell off alongside tech stocks and other risk assets, historical patterns from the 2020 recession suggest a potential rebound,” Lian explained. After the March 2020 crash, Bitcoin soared over 1,050%—from $6,000 to a record $69,000 in November 2021—following the Federal Reserve’s $4 trillion liquidity injection.
Still, Lian noted the rising correlation between Bitcoin and tech equities, which injects volatility into its inflation-hedge thesis. “In stagflation, Bitcoin could mimic gold, appealing to investors seeking to preserve value,” he said.
