Bitcoin Sees Modest Recovery Amid Trade War and Recession Fears

Bitcoin Recovery Limited by Economic Uncertainty

Bitcoin showed signs of recovery on Thursday, rising 1.8% to $83,511.6, as softer-than-expected U.S. inflation data provided a modest boost to sentiment. However, the cryptocurrency's gains were tempered by persistent concerns over a potential U.S. recession and escalating trade tensions under President Donald Trump's policies.

Broader Crypto Market Sees Mixed Movements

The broader crypto sector mirrored Bitcoin's cautious optimism, with altcoins like Solana, Cardano, and XRP posting marginal gains. However, Ether, the second-largest cryptocurrency, dipped 0.6% to $1,866.80, lagging its peers after hitting a three-year low earlier in March. Meme tokens, such as Dogecoin and $TRUMP, saw notable increases, rising 3.3% and 4.2%, respectively.

Trade War and Recession Fears Weigh on Markets

Despite the mild rebound, Bitcoin and the crypto sector remain under pressure due to heightened economic uncertainty. Trump's 25% tariffs on steel and aluminum, along with plans for higher duties on European goods, have raised fears of global trade disruption and inflationary pressures. These concerns, coupled with the possibility of a U.S. recession, have kept risk appetite in check, impacting speculative assets like cryptocurrencies.

Focus Shifts to Key Economic Data

Markets are now eyeing the upcoming producer price index (PPI) data and the Federal Reserve's interest rate decision, scheduled for next week. The central bank is widely expected to maintain its current stance amid economic uncertainty, which could provide further clarity on the outlook for risk assets like crypto.

Bitcoin Underperforms U.S. Stocks in 2025

So far this year, Bitcoin has underperformed the U.S. stock market, with a 10% decline compared to a 4.6% drop in the S&P 500. This reflects the broader risk-averse sentiment, as investors remain cautious amid global economic headwinds.