We are Officially in Recession, Ending the Longest 11-Years Expansion in US History

The S&P 500 has erased all of its 2020 losses and not a single one of its stocks have been down since the benchmark bottomed in March.

But the stock market is not the economy and according to the National Bureau of Economic Research, the worst US downturn since the Great Depression is officially a recession now.

“The committee recognizes that the pandemic and the public health response have resulted in a downturn with different characteristics and dynamics than prior recessions,” the Business Cycle Dating Committee of NBER, the official arbiter of recessions said in a statement on Monday.

Nonetheless, the unprecedented magnitude of the decline in production and employment and “its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions.”

In March this year, US Federal Reserve Chairman Jerome Powell had also said that “we may well be in a recession.”

The committee noted a significant decline in economic activity spread across the economy after a “clear peak” in February.

“A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough.”

In Q1 2020 US GDP fell 5% and could post the worst decline in Q2, at over 50%. The unemployment rate in April is more than 19.5%.

The recession brings an end to the longest 11-years expansion in US history.

Most economists, however, think the contraction will end in the second quarter. Goldman Sachs economist, Jan Hatzius said while this is “almost certainly the deepest recession since” the war, “it is almost certainly also the shortest recession.”

Bitcoin in Recession

This could also have an effect on the climbing stock market. Some say once this rally falters, it will all reverse.

However, for now, the rally in US stocks has claimed another bear. Stan Druckenmiller who was warning about owning stocks last month and noted that it isn’t usually wise to bet against the Federal Reserve is now saying that he was “far too cautious,” during the current gains.

“I missed a great opportunity here. Won’t be the last time,” said the legendary investor.

What’s happening is the “excitement of pre-opening” which is in part due to the intervention by the Fed and on positive news on the prospect of a vaccine for coronavirus.

The cryptocurrency market, meanwhile, is holding steady for the past few weeks, with bitcoin trading around $9,700.

Market participants believe recession to be a good thing for bitcoin. As a matter of fact, they see it as a perfect storm for the next bull market.

Bitcoin which has been following the risky assets may decouple from S&P 500 and central banks’ finance stimulus packages which include increasing monetary supply will put pressure on fiat currencies and turn out to be positive for BTC price.

Bitcoin acting as a risky asset could spell danger for the flagship cryptocurrency during a recession but it doesn't invalidate its potential as a safe haven.

Also, the digital asset’s correlation with gold is at a record high which means just like the precious metal it could experience a sell-off only to emerge as the winner.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Crypto Exchange Gemini Makes an Aggressive Move, Adds 15 Hot DeFi Tokens

DeFi is all the rage in today's crypto world, and no one wants to be left behind, especially cryptocurrency exchanges. Over the past few months,...

Ethereum ‘Getting Ready for Spadina' Testnet Next Week

The Spadina testnet of ETH 2.0 has been scheduled for genesis before the month ends, on September 29 at 12 pm UTC, as per...

KuCoin Hack: Exchange’s Insurance Fund to Cover User Loss “Completely,” Tether Freezes 33M USDT

The Singapore-based cryptocurrency exchange KuCoin released a statement regarding detecting large withdrawals on September 26, 2020, at 03:05:37 (UTC+8). The exchange has reportedly lost $150...

Crypto Custodian, Anchorage, Adds Support for DeFi Tokens: BAL, NXM, AAVE, UNI, and YFI

Anchorage, the Delaware corporation headquartered in San Francisco, California, and digital asset custodian for institutional investors is diversifying its DeFi token options for its...

Coinbase Wallet Targeted by New Trojan Malware Dubbed ‘Alien’

The Coinbase wallet is among 226 Android applications targeted by a recently discovered Trojan dubbed ‘Alien.’ This malware mostly targets the financial services space...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today