Crypto analyst Willy Woo has cautioned that the next major Bitcoin and broader crypto market downturn could be the harshest yet. According to him, this is not because of BTC usual halving cycles or shifts in money supply, but due to an approaching global business cycle downturn that crypto markets have never experienced before.
“The next bear market will be defined by another cycle people forget about,” Woo said on Monday, referring to the traditional business cycle that drives expansions and recessions in the broader economy.
Beyond Bitcoin Four-Year Halving Pattern
Historically, Bitcoin and the wider crypto market have moved in four-year cycles closely aligned with Bitcoin halving events and the global M2 money supply. Woo noted that both cycles have overlapped so far, fueling predictable boom-and-bust patterns.
“Central banks inject M2 debasement in four-year cycles [and] both superimpose,” he explained. But he warned that the next downturn could be shaped by an entirely different force, the global business cycle.
According to Woo, the last major business cycle contractions occurred in 2001 and 2008, long before Bitcoin creation. “If we get a biz cycle downturn, like 2001 or 2008, it will test how BTC trades. Will it drop like tech stocks, or will it drop like gold?” he asked.
Recession Risk and Liquidity Crunch
A business cycle downturn, often referred to as a recession, is characterized by shrinking GDP, rising unemployment, and lower consumer spending. Woo emphasized that crypto markets, despite their digital independence, remain deeply tied to global liquidity conditions.
The 2001 “dot-com bubble” led to a 50% plunge in the S&P 500 as tech valuations collapsed. In 2008, the financial crisis triggered a 56% market decline alongside a sharp GDP contraction and widespread unemployment. If a similar liquidity squeeze hits again, crypto could face unprecedented pressure.
The National Bureau of Economic Research (NBER) monitors employment, income, industrial output, and retail sales to identify recessions. While the brief pandemic recession in 2020 was short-lived, current risks remain elevated due to slower growth and new trade tariffs. Economists expect tariffs to weigh on U.S. GDP growth through early 2026.
Woo noted that financial markets, including crypto, are inherently forward-looking. He concluded by suggesting that Bitcoin current market position could be signaling an approaching economic peak.