Goldman Sachs forecasts the probability of an economic recession in America to be 35%, Bitcoin records the worst quarter since 2018.

Bitcoin (BTC) just experienced its worst Q1 in six years, with signs that the selling pressure is not over. Against this background, Goldman Sachs has revised its view of the US economy in a more pessimistic direction. The bank now expects the (Fed) Federal Reserve and European Central Bank (ECB) to cut interest rates more aggressively than expected, while raising the probability of a recession in the U.S. economy to 35%.

Raising tariffs: A shock to the financial market

The latest tax move by President Donald Trump is not only targeting certain countries but also affecting the entire global economy. This instability has caused chaos in the Wall Street market, leading to a sharp decline in Bitcoin, as the cryptocurrency has lost nearly 23% of its value in the past 60 days.

Not only the Bitcoin market, but the total market capitalization of the global cryptocurrency market has also plunged more than 5% over the past month, currently standing at 2.63 trillion USD.

Goldman Sachs warns: Inflation surges, growth slows down

According to the latest reports, Goldman Sachs has adjusted its GDP growth forecast for the US down to 1.5% from 2.0%, while the inflation forecast has risen to 3.5% from the previous 3.0%. This is a negative signal for the economy, but it could also be a catalyst for the Fed to accelerate the pace of interest rate cuts.

In addition, Goldman Sachs estimates that the U.S. tax rate could rise by an additional 15 percentage points by 2025, which is 5 percentage points higher than the baseline forecast. This week could mark the "retaliatory tariff war" as Trump declared Wednesday as "Liberation Day," with a 20% tax applied to over 25 countries. According to forecasts, by the end of April, the total value of imports affected by U.S. tariffs could reach $1.5 trillion.

In response to the US move, many countries were quick to respond. Canada announced counterpart tariffs worth $21 billion on U.S. goods. China has also imposed tariffs of 10 to 15 percent on agricultural products imported from the United States. The European Union (EU) vowed retaliatory action, while Mexico's president confirmed it would announce reciprocal tariffs on April 3.

Bitcoin plunges, gold shines

While Bitcoin continues to slide, gold is witnessing a strong uptrend as investors seek safe havens. BTC is currently struggling to regain the important threshold of 85,000 USD after losing about 7% of its value in the past week and more than 12% in the quarter. As of now, Bitcoin is trading at 82,153 USD, with a 24-hour trading volume surging 45% on Monday, reaching 20.2 billion USD.

In contrast to BTC's weakening momentum, gold prices continuously set new highs as shelter capital flowed into the precious metal. Bitcoin is now down 30 percent from its peak in January, while gold has caught investors' attention. Gold ETFs recorded net inflows of up to $12 billion over the past two months. The S&P 500 is down 5% year-to-date, but gold prices are up nearly 17% in the same period.

! Bitcoin records worst Q1 since 2018Comparing Bitcoin's performance quarter-on-quarter since 2016 | Source: CoinglassAccording to data from Coinglass, Bitcoin's open contracts have decreased slightly but are gradually approaching the $53 billion mark. The long/short ratio currently stands at 0.6051, indicating that 62.3% of traders expect BTC price to continue falling. Meanwhile, Bitcoin ETFs have just ended their longest streak of attracting cash flows since the beginning of the year. Fidelity's FBTC fund recorded outflows of $93.16 million, completely reversing the previous day's $97.14 million inflow.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should do thorough research before making decisions. We are not responsible for your investment decisions.

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