Economists Predict Recession. Should Crypto Holders Worry?

The New York Fed forecasts a 38% chance of a recession within the next year, which history shows is an almost certain indicator the economy will slow down

article-image

Morrowind/Shutterstock.com

share

If the US economy is headed into a recession, risk assets such as crypto and tech equities should buckle up, analysts say. 

The New York Federal Reserve’s recession probability model is now predicting a 38% chance that the US will go into a recession in the next 12 months. 

“This understates the real probability which, based on +60 years of history, is now close to 100%,” Nicolas Colas, co-founder of DataTrek Research, said. 

The New York Fed uses the difference between 3-month and 10-year Treasury yields to determine their figure. Historically, nearly every single time the New York Fed’s model has called for a chance of recession above 30%, a recession was either already underway or occurred within 12 months, Colas noted. 

“The economy is entering slowdown mode as final third quarter nonfarm productivity data was revised higher and labor costs were significantly revised lower,” Edward Moya, senior market analyst at Oanda, said. “Yield curve inversion deepens and nears a four-decade low which is clearly setting up this economy for a recession that won’t be a mild one.”

With risk appetite fading, bitcoin and ether continued to trend lower Wednesday, each losing about 1.6% and 3%, respectively. Bitcoin continued to hover below $17,000. 

Equities struggled to stay in the green Wednesday as well with the S&P 500 and Nasdaq composite indexes losing 0.2% and 0.5%, respectively. 

“Bitcoin has massive resistance at the $17,500 level and that should hold leading up to next week’s FOMC decision,” Moya said. “Long-term crypto bets that are waiting to be placed will require either a bullish fundamental trigger or a capitulation moment that has bitcoin testing a key technical level.” 

The Fed is set to release its latest decision next week, and investors will surely want to know how Chair Jerome Powell is thinking about rates in view of a potential economic slowdown. 

As of Wednesday, futures markets were pricing in about a 75% probability that the Fed will opt for a 50 basis point rate hike, which would be a mild decrease from its streak of 75 basis point increases, according to data from CME Group.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Pipe’s testnet has delivered 60+ PB of data across ~290,000 Point of Presence (PoP) nodes

article-image

375ai will hold TGE at the end of the month, CEO Harry Dewhirst told Blockworks

article-image

Block’s subsidiary adds direct Bitcoin integration and AI-powered ordering tools for small businesses seeking streamlined transactions

by Blockworks /
article-image

The deal integrates Dinero’s staking suite into Plume’s real-world asset platform as it gains SEC transfer agent status

by Blockworks /
article-image

The state’s decision opens staking access to New Yorkers, signaling a regulatory shift toward broader crypto participation

by Blockworks /
article-image

The startup says it aims to rival Stripe and Worldpay by using stablecoins to speed merchant settlements from days to seconds

by Blockworks /