Despite bearish Q1 predictions, the Atlanta Fed is currently estimating that the US GDP in Q2 2025 will increase by 4.6%. This impressive turnaround could signal new inflows to crypto.
Such a sudden about-face is leading some economists to doubt its conclusions. Trump’s tariffs, sanctions, and trade wars may restart soon, bringing bearish chaos right back into the markets.
Is the US GDP Going to Grow?
Just a few weeks ago, the markets were receiving a deluge of recession indicators. The Atlanta Fed estimated negative GDP growth in February, and other federal institutions repeated these concerns in April.
However, new trade agreements have turned these estimates around, and Atlanta is now predicting 4.6% US GDP growth:
If these US GDP predictions are accurate, it’d be hugely bullish for crypto. Bitcoin has been less volatile than usual lately, encouraging massive firms to invest in it as “digital gold.”
More economic growth would firmly push back recession fears, potentially leading investors to invest in riskier assets, especially crypto.
However, the Atlanta Fed’s prediction might be a simple overcorrection. Months ago, it predicted the beginning of a recession. Have the fundamentals underpinning US GDP really changed that much since?
An end to US-China tariffs pumped the market, but Trump is considering new sanctions to replace them. He is also reigniting tariffs against the EU, which are set to take effect soon.
All that is to say, a resumed trade war would put the US GDP right back where it was a few weeks ago. Some economists are continuing to predict a major stock market collapse, but it’s hard to be sure of anything.
Case in point, the judiciary is trying to undermine Trump’s authority to levy tariffs, adding yet another wild card to this hectic situation.
If things continue as normal, the US GDP is allegedly set to usher in a bullish moment. However, any number of tertiary factors could introduce new chaos.
No matter what happens, Bitcoin has a long track record as a hedge against inflation or other negative developments. Crypto will find a way to succeed either way, but its 3-month prospects are very uncertain.
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