The stock, cryptocurrency, forex, and bond markets are bracing themselves for a 2008-like financial crisis as recession risks rise. Bitcoin remains under pressure, while popular altcoins like Cardano (ADA), Pepe (PEPE), Ripple (XRP), and Hedera (HBAR) are still in a bear market.
Top Experts Warn of a Financial Crisis
Top analysts are warning that the US may be approaching a major financial crisis that could be bigger than the 2008 Global Financial Crisis.
In an editorial piece on Wednesday, Bloomberg analysts cautioned that policymakers should prepare for a sustained crisis in the coming months. They warned that the US economy would likely sink into a recession due to public, household, and corporate debt.
Government debt has jumped above $36.7 trillion, with household and corporate debt at over $13 trillion and $18 trillion, respectively. As recession odds rise, they expect creditors to seek more collateral, which may trigger a panic.
The Bloomberg editorial board is not the only one warning of a major crisis. In a recent LinkedIn post, Billionaire Ray Dalio warned that the world was staring at a Monetary Order Breakdown that could mirror the Great Recession. He said:
“Right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well.”
These warnings arise amid increasing recession risks. Moody’s economist Mark Zandi has boosted his recession probability to 60%, and polymarket traders have placed the odds of a crash at over 65%.
How Would a Crisis Affect BTC and Altcoins Like Cardano, Pepe, XRP, and Hedera?
A major crisis would have a mixed impact on stocks, Bitcoin, and altcoins like Cardano, Pepe, XRP, and Hedera Hashgraph. It would initially lead to a panic sell-off as investors move to safe havens like gold and the Swiss franc.
After that, these tokens would stage a strong comeback as policymakers intervene. Indeed, Fed officials have hinted at their readiness to intervene, likely through interest rate cuts and quantitative easing. The Fed has established credit lines with major central banks, including the European Central Bank (ECB) and the Bank of England (BoE).
Historical interventions, like during the COVID pandemic, effectively boosted asset prices as the Fed cut rates and injected liquidity into the market.
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