Goldman Sachs sees 35% recession risk, Bitcoin logs worst Q1 since 2018

Bitcoin (BTC) wrapped up its worst quarter 1 since 2018 and the pain might not be over yet. Goldman Sachs just turned bearish on the US economy. They’re now expecting more Fed and ECB rate cuts and have raised US recession odds to 35%.

US President Donald Trump’s latest tariff escalation is set to hit every country, not just a select few. That’s got Wall Street rattled, leaving BTC price to drop by almost 23% in the past 60 days. However, the global crypto market cap has also seen a decline of over 5% over the last month to $2.63 trillion.

Goldman warns of higher inflation, slower growth

As per reports, Goldman now sees a slower GDP growth forecast of 1.5% instead of 2.0% and higher inflation of 3.5% instead of 3.0%. It seems to be a piece of bad news for the economy but rate cuts could be coming faster.

The financial giant expects the US tariff rate to jump 15pp in 2025 and it is 5pp ahead of its baseline forecast. This is about to be the “reciprocal tariff” week as Trump has called Wednesday “Liberation Day” with 20% tariffs coming on more than 25 countries. It can be foreseen that US tariffs will impact $1.5 trillion worth of imports by the end of April.

BREAKING: President Trump's team is weighing "broader and higher tariffs" ahead of Wednesday's reciprocal tariffs deadline, per WSJ.

President Trump is reportedly weighing "an across-the-board hike of up to 20%."

Again, April 2nd is NOT the end of tariff uncertainty. pic.twitter.com/1R568CP4U4

— The Kobeissi Letter (@KobeissiLetter) March 31, 2025

On top of this, Canada has already announced reciprocal tariffs on $21 billion of US goods. On the other side, China has placed 10-15% tariffs on US agricultural products. However, the EU has vowed retaliatory tariffs as well while Mexico’s President has already vowed to announce counter-tariffs on April 3.

Bitcoin bleeds as gold shine

Meanwhile, Bitcoin is getting wrecked. BTC prices are struggling to regain the crucial $85K mark. It has dropped by around 7% in the last 7 days and down by more than 12% quarterly. Bitcoin is trading at an average price of $82,153 as of press time. Its 24-hour trading volume spiked by 45% on Monday to stand at $20.2 billion. 

While BTC fumbled, gold hit multiple all-time highs as investors sought a safe-haven bet. BTC is down 30% from its January peak, while gold is stealing the spotlight. Gold ETFs have seen a massive $12 billion in net inflows over the last 2 months. While the S&P 500 is down -5% YTD, gold prices are up nearly 17%.

As per Coinglass data, Bitcoin’s open interest is down marginally but declining towards the $53 billion mark. The long/short ratio is at 0.6051, meaning 62.3% of traders expect more downside. Bitcoin ETFs also ended their longest inflow streak of the year. Fidelity’s FBTC saw $93.16 million in outflows, reversing the $97.14 million it got the day before.

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