According to data shared by the US administration today, the US has shrunk for the first time since the coronavirus pandemic. Development bitcoin and cryptocurrencies What does it mean for
US Economy Shrinks 1.4 Percent Contrary to Expectations
According to a report by the Bureau of Economic Analysis, analysts expected gross domestic product (GDP) to grow by as much as 1% in the first quarter of 2022, instead shrinking by 1.4% according to the data.
With Bitcoin and cryptocurrencies moving in correlation with stock markets recently, the slowdown in economic growth, which may mean a recession in the future, may affect the entire digital asset market, including Bitcoin.
After the announcement of the growth data, there was no sudden movement in the crypto money market.
Danielle Booth, CEO of Texas-based economics firm Quill Intelligence, said in her statement:
“The fact that there has been no overreaction in the markets means that it does not point to a picture as bad as the title of the report announced.”
Trade and stocks were key factors in the GDP decline, while consumer spending and business investment remained strong. This shows that the recovery from the pandemic remains intact.
Ken Kim, senior economist at KPMG, commented:
“When we look at the last quarter of 2021 and the first quarter of this year together, we reach an average of 2.8% economic growth. This ratio is still considered a very strong value.”
“Bitcoin May Be Affected Negatively”
Joe Haggenmiller, head of markets for crypto finance company XBTO, evaluated the developments as follows:
“Data released today suggest that we are closer to the likelihood of a recession than before. If negative growth continues, the stock markets and the positively correlated Bitcoin may suffer.”
*Not investment advice.