This One Weird Recession Trick Could Make Bitcoin Rich (And the Fed Squirm)

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Key points:

  • Bitcoin traders are loitering around like riverboat gamblers, waiting to see if the US economic policy pulls a Houdini and loosens up, since the latest batch of data has the Federal Reserve backed into a corner slicker than a raccoon in a rain barrel.

  • Odds are as good as finding a catfish in the Mississippi: Recession’s sniffing around, thanks to rising unemployment and inflation popping up like dandelions in spring.

  • A good ol’ fashioned recession just might serve up a buffet for Bitcoin and other risk assets. Who’d have thunk it?

Bitcoin (BTC), the town troublemaker, looks ready to profit from a US recession, which is primed to be the “base case scenario.” Or, as they say down at the hardware store, “When the roof leaks, at least the ducks are happy.”

According to the soothsayers over at The Kobeissi Letter and their fellow crystal-ball gazers, things aren’t looking rosy for the US economy or the Federal Reserve. In fact, they’re staring down more dilemmas than a squirrel in traffic.

Fed’s “Worst Nightmare” – Now With Extra Nightmares!

The US’s financial state, already wobblier than my Aunt Sally’s apple pie at a church picnic, is about to get rickety: trade tariffs and inflation are tag-teaming to make sure of it. Bleak new macroeconomic stats — featuring Q1 GDP flopping like a catfish out of water and some inflation numbers only a Fed banker could love — have the Federal Reserve painted tighter than a fence by Tom Sawyer.

GDP numbers underperformed harder than a mule at a horse race, turning negative when folks were expecting a 0.3% gain. That’s less “economic growth” and more “barn burned down and the corn’s missing.”

“Essentially, the Fed has to choose between stomping out inflation or keeping folks employed,” the report says. In other words, they’re juggling chainsaws and hoping nobody notices the crowd forming. Nightmare? More like a double-feature with a side of insomnia.

The real pickle is when (or if) to cut interest rates — something crypto traders are watching closer than a dog watches a ham sandwich, hoping a rate trim will add some fizz to the market punch.

As Kobeissi explains it, “If we don’t chop rates, GDP sags like grandpa’s suspenders and unemployment climbs. But if we cut too soon, inflation leaps back like a frog on a hot skillet.”

Long story short, it’s a good old-fashioned “lose-lose.” The Fed’s staring down both stagflation (when prices and unemployment both run wild) and an outright recession, like a sheriff with not enough deputies. Kobeissi says a US recession isn’t just possible, it’s expected, especially if you listen to the prediction hawks at Kalshi.

Bitcoin Analyst Spots a Shiny Lining on That Storm Cloud

Fresh data from the CME Group’s FedWatch Tool shows that Wall Street expects the Fed to keep its hands tighter than a miser at Christmas through 2025, despite President Trump shouting from the rafters that rates should shrink.

Everyone’s betting the June FOMC meeting will bring the next 0.25% rate trim; odds for a May move are sitting at just 3% — which is lower than my interest in turnips.

Crypto traders are chewing their nails as things get murkier than the Mississippi after a thunderstorm.

As Skew, a trader with a name like a bad poker hand, says: “Yesterday we had a 57% chance of a cut for June; now it’s 63%. The Fed’s got to choose between keeping prices down or keeping the whole wagon from rolling into the river.”

“Push is coming to shove and the Fed has to choose — worry about inflation, or admit the economy’s looking flatter than Kansas in July.”

Crypto trader and entrepreneur Michaël van de Poppe — a man with more hats than a haberdashery — figures a recession will all but force the Fed to throw a party and cut rates, whether they like it or not.

“The gossip about recession is growing louder than a frog chorus, which should prod the FED to loosen policy,” he chimed in on X (formerly Twitter).

“That’s when things might hit rock-bottom, liquidity’ll spill into the markets, and the risk-takers will get to dance — at least until the next storm blows in.” 🕺💸

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2025-05-01 12:26