The cryptocurrency markets are performing positively in 2023 after Bitcoin went from $16,500 to $24,500 since the start of January. Despite the rally, warnings of an impending recession loom as leading technology firms lay off employees to stay afloat. From Google to Microsoft and Amazon, Fortune 500 companies are letting go of employees to weather the storms of a recession. Bitcoin and the cryptocurrency markets could also be largely hit if a recession enters the markets.
A financial crisis might make Bitcoin nosedive in price and drag the entire cryptocurrency market down with it. As a result, the overall markets are now teetering on the precipice of a recession.
Also Read: When Will Bitcoin Breach Its All-Time High of $69,044?
Bitcoin & The Cryptocurrency Markets Could Lose $600 Billion
The overall cryptocurrency market cap stands at $1.16 billion on Thursday, with an increase of 1.1% in the last 24 hours. Leading cryptocurrency analyst Benjamin Cowen predicts that in a “worst-case scenario”, the overall market cap could plunge between 50 and 60%. He warned his 784,000 YouTube subscribers that if a recession hits the markets, around $600 billion in market cap could vanish.
Also Read: Bitcoin To Reach $50,000 by May 2023? ‘Numbers Could Get Big Fast’ Claims Analyst
“I believe that the worst case scenario for the total market cap is somewhere between $400 and $500 billion, which would essentially represent another 50% move to the downside from these levels.,” he said.
If the cryptocurrency market cap falls below $500 billion, Bitcoin and leading altcoins could be butchered in the indices. “Which is kind of crazy to think about. I don’t really think it’s a common scenario that a lot of people are even considering,” said Cowen.
Leading banks such as JP Morgan, Standard Chartered, and the World Bank have predicted a recession in 2023. You can read the doomsday predictions here.
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At press time, Bitcoin was trading at $24,209 and was down 0.1% in the 24-hour day trade. BTC is also down 64.83% from its all-time high of $69,044 which it reached in November 2021.