Global markets have been raging since the US reported a decline in gross domestic product (GDP) growth for the second straight quarter, marking a ‘technical recession’. The US Bureau of Economic Analysis released data that the country’s annualized economic growth rate declined another 0.9% in the second quarter, contrary to economists’ expectations of a 0.5% increase.
The report explained that “the decline in real GDP reflected declines in private stock investment, residential investment, federal spending, state and local government spending, and non-residential fixed investment that was partially offset by increases in exports and personal consumption expenditure (PCE)”.
On the one hand, the US economy is facing a clear recession. On the other hand, politicians blatantly deny the same and are redefining the recession altogether. After the GDP news broke, White House press secretary Jean-Pierre dismissed claims that White House officials are “redefining the recession” while redefined why two consecutive quarters of negative GDP growth don’t qualify as one. recession.
In addition, the White House website even changed the definition of recession ahead of the event of “two consecutive quarters of GDP contraction” to say that the two-quarter rule is incorrect.
How will Bitcoin react to recession?
The financial markets reacted with panic to the recession, but it is still unclear how Bitcoin will react in the near future. In 2020, the US experienced its shortest recession due to the pandemic that further led to a temporary dip in the price of bitcoin. Nevertheless, the period lasted two months, which prevented the cryptocurrency from experiencing a profound impact.
Historically, stock and stock markets have tended to plunge into a bear period during recessions. Given that bitcoin and the rest of the cryptocurrency market are often compared to assets with risks, it is possible for the crypto industry to move in sync with other assets with risks.