- Bitcoin prices have rebounded from April lows amid growing fears of a U.S. recession triggered by Trump’s aggressive trade tariffs.
- Billionaire Ray Dalio warns that the U.S. is approaching a financial crisis potentially “worse than 2008,” with trade wars weakening dollar confidence.
- BlackRock‘s digital assets head suggests a recession could actually boost Bitcoin’s value through resulting fiscal and monetary policies.
Cryptocurrency markets are experiencing significant volatility as President Donald Trump‘s expanding trade tariffs fuel concerns about U.S. dollar stability and recession risks. Bitcoin has recovered from April lows of around $75,000, even as global markets react to tariffs reaching as high as 145% on Chinese exports and a new 10% tax on most goods entering the United States.
Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, has issued a stark warning about the economic outlook. “I think that right now we are at a decision-making point and very close to a recession,” Dalio told NBC, adding that he’s “worried about something worse than [the 2008] recession if this isn’t handled well.” Notably, Dalio correctly predicted the 2007-2008 financial crisis.
Trade War Intensifies as Dollar Weakens
The escalating trade tensions have begun impacting currency markets. The ICE U.S. Dollar Index dropped below the critical 100 level last week, potentially returning to its 2022 trading range. On social platform X, Dalio described the situation as “a classic breakdown of the major monetary, political, and geopolitical orders” that “occurs only about once in a lifetime.”
China has responded to U.S. tariffs with 125% levies on American products, while other countries face a 90-day deadline before higher charges could be implemented. According to betting markets reported by Coindesk, the odds of a U.S. recession now stand between 40% and 60%.
Bitcoin’s Potential Resilience in Economic Downturn
Interestingly, some cryptocurrency experts see potential benefits for Bitcoin even in an economic downturn. Robbie Mitchnick, head of digital assets at BlackRock, suggested last month that economic contraction could actually boost Bitcoin prices. “I don’t know if we’ll have a recession or not, but a recession would be a big catalyst for bitcoin,” Mitchnick told Yahoo Finance.
Mitchnick explained that typical recession responses—including increased government spending, growing deficits, reduced interest rates, and monetary stimulus—have historically benefited Bitcoin’s value. This perspective aligns with the cryptocurrency’s performance so far in 2025, as it has maintained strength despite growing economic concerns.
Analysts from the Bitfinex exchange remain optimistic about Bitcoin’s prospects. “Bitcoin is consolidating at higher levels (and above where it was trading before Trump’s election win in November last year),” they noted in a recent statement, adding that “the market is coiled, not broken, and the coming months could bring significant upside if catalysts align.”
U.S. national debt, which has exceeded $35 trillion in early 2025 following massive COVID-era spending, remains a concern for long-term dollar stability. In December, Dalio specifically warned of a potential “debt crisis” that could significantly devalue the U.S. currency.
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