The Bureau of Economic Analysis has rolled out its report on the second quarter of 2022 Gross Domestic Product (GDP) which shows a decrease at an annual rate of 0.9%. This marked the second consecutive quarter of the United States having negative economic growth.

This news prompted a discussion within the bitcoin community with many believing that the U.S. is already in a recession. Twitter account @BTC_Archive posted:

And Bitcoin Magazine tweeted:

Many in the bitcoin community believe that the U.S. is already in a recession. Some are criticising the way the government is denying that the economy is in recession.

A recession used to be defined as two consecutive quarters of negative GDP growth. However, the Bureau of Economic Analysis doesn’t define recessions like this anymore.

On the glossary section on its website it states:

“In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation.”

The U.S. government argued that while it is true that it is experiencing two consecutive quarters of negative GDP, the unemployment rate is low and consumer spending remained strong with positive data on the credit quality of Americans, which does not translate into a recession at all. “A recession is broad-based weakness in the economy. We’re not seeing that now,” said U.S. Treasury Secretary Janet Yellen.

But the American public disagrees. In a recent poll on Morning Consult & Politico, 65% of registered voters that participated believed that the United States is already in a recession.

Wikipedia already added a new row with the entry “July 2022–present” to its “List of recessions in the United States” article.

Opinions aside, the big question is “How will the bitcoin market react during a recession?”. Currently, the price of bitcoin is going up and the market is experiencing a relief rally. On the other hand, looking back at the 2018 bear market, it might take months for bitcoin to recover and years for it to regain its all-time high.

Bitcoin has only ever experienced one other recession, which was the shortest recession in history, during the onset of the Covid-19 pandemic.

At the time, the bitcoin price dropped by over 50% in just two days before starting its epic rally to almost $70,000 when the Federal Reserve began its quantitative easing program and lowered interest rates to zero.