According to Woo, previous market cycles have largely revolved around two forces: Bitcoin’s four-year halving schedule and changes in global money supply (M2). Historically, both have moved in tandem, fueling predictable patterns of boom and bust. This time, however, Woo believes crypto will have to endure something much more fundamental – a business cycle downturn similar to those that hit traditional markets in 2001 and 2008, long before crypto even existed.
“If we see a business cycle crash like in 2001 or 2008, it will test Bitcoin’s true nature,” Woo said, questioning whether BTC will behave more like a high-risk tech stock or a safe-haven asset such as gold.
Liquidity and Economic Reality
A business cycle downturn, often synonymous with a recession, typically brings falling GDP, higher unemployment, and declining consumer spending – conditions that can quickly drain liquidity from risk markets. Woo emphasized that the crypto sector, despite its decentralized structure, remains tied to the broader economy through global liquidity flows.
Historical downturns illustrate the scale of potential impact. The dot-com collapse at the start of the century wiped out half of the S&P 500’s value, while the 2008 financial crisis saw similar losses amid a global credit freeze. Although the short-lived 2020 recession barely dented digital assets, Woo suggested that a prolonged contraction could expose how deeply intertwined crypto has become with traditional finance.
Recession Risk Still Looms
Data from the National Bureau of Economic Research (NBER) shows no current signs of a formal recession, but analysts warn that risks remain elevated. Trade tariffs introduced in 2025 have already slowed global growth and could weigh further on GDP into 2026.
Woo concluded that Bitcoin’s next major move will depend on how markets price in these macro factors. “Either BTC is signaling that the broader markets have peaked, or it’s preparing to catch up,” he said – leaving investors to wonder which version of Bitcoin will emerge when the next true recession hits.