Bitcoin’s Recession Hype: Too Soon to Pop the Champagne? 🍾

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Ah, mes amis! It seems our dear Bitcoiners are already donning their rose-tinted spectacles, dreaming of a bullish utopia amidst the looming specter of recession. But hold your horses, or should I say, your Satoshis! Markus Thielen, the grand maestro of 10x Research, hath spoken: “Expecting a bullish impulse is too early.” 🎭

In his April 11 markets report, Thielen, with the gravitas of a seasoned tragedian, noted that credit spreads are widening, a sure sign that “recessionary concerns may be seeping deeper into the economy.” Mon dieu! The plot thickens! 🕵️‍♂️

Bitcoin’s Short-Term Woes: A Comedy of Errors

While the long-term effects of a recession might be a boon for Bitcoin—thanks to the monetary easing that typically follows Fed rate cuts—Thielen warns of short-term headwinds. “Normally, Bitcoin first sells off when China devalues or the Fed cuts,” he told CryptoMoon, adding, “the first cut might not be so impactful and also confirms economic weakness.” Quelle surprise! 🎢

Meanwhile, David Sacks, the White House’s crypto and AI czar, took to X on April 10, declaring it “time for a rate cut” after the core Consumer Price Index rose a mere 2.8% year-by-year for March. But alas! The CME Group’s FedWatch Tool shows a 64.8% chance of no rate cut at the Fed’s May meeting. Sacré bleu! 🎭

Traders, ever the optimists, see rate cuts and monetary supply expansions as a godsend for asset prices, especially Bitcoin. But Thielen, ever the skeptic, points out that historically, when credit spreads widen, Bitcoin often faces more downside pressure and takes longer to recover. “This pattern suggests that while a longer-term opportunity may emerge, Bitcoin could still face pressure in the near term,” he said. Oh, the irony! 🎭

And let us not forget the weakening US dollar, which has market participants in a tizzy. The US Dollar Index (DXY) sits at 100.048, down 2.92% over the past five days. The Kobeissi Letter, in an April 10 X post, quipped, “The US dollar has exited the room. Once again, something is broken.” C’est la vie! 🎭

Meanwhile, Robbie Mitchnick, BlackRock’s head of digital assets, opined in late March that Bitcoin would most likely thrive in a recessionary macro environment. “I don’t know if we’ll have a recession or not, but a recession would be a big catalyst for Bitcoin,” he said. Ah, the eternal optimist! 🎭

So, mes amis, while the Bitcoiners may be dreaming of a bullish future, it seems the road ahead is fraught with peril. But fear not! For in the grand theater of finance, the show must go on! 🎭

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2025-04-11 09:15