On-chain analyst Willy Woo has cautioned that the next crypto bear market may unfold under entirely new conditions — driven not by Bitcoin’s halving or liquidity cycles, but by a global business cycle downturn similar to the recessions of 2001 and 2008.
A Different Kind of Crypto Correction Ahead
In a post shared on Monday, Woo noted that crypto’s previous downturns were largely influenced by Bitcoin halving cycles and changes in global M2 money supply, both of which move in roughly four-year patterns.
According to data from the National Bureau of Economic Research (NBER), the U.S. economy has not entered a formal recession since the brief 2020 downturn. However, new trade tariffs and slower industrial growth have already trimmed GDP expansion in early 2025, with analysts warning that risks will persist into 2026.
“Central banks inject M2 debasement in four-year cycles, and both superimpose with Bitcoin’s halvings,” Woo explained.
However, he warned that the next major correction could be shaped by traditional economic forces, as global liquidity tightens and economic growth slows. “If we get a business cycle downturn like 2001 or 2008, it will test how Bitcoin trades — will it behave like tech stocks or like gold?” he said.
Understanding the Business Cycle Risk
A business cycle downturn — marked by shrinking GDP, higher unemployment, and reduced consumer spending — has never coincided with a mature crypto market. The last full recessions, in 2001 and 2008, both led to sharp equity market declines of over 50% in the S&P 500.
Woo’s analysis suggests that cryptocurrencies may face liquidity shocks if global risk assets sell off. He added that crypto is not isolated from macro trends: “Bitcoin is still a speculative market — it reacts to global liquidity conditions just like equities.”
Woo concluded that Bitcoin may either signal that global markets have peaked — or still have room to catch up, depending on how liquidity trends evolve.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.