US economy is experiencing worst slump since the Great Recession - what does this mean for Bitcoin?

Yesterday, the U.S. Department of Commerce officially announced that the U.S. economy contracted 4.8% in the first quarter of this year - the largest quarterly decline in gross domestic product (GDP) since the Great Recession in 2008, the Guardian said .

To curb the spread of the corona virus, the lion's share of the US economy was shut down in March, causing 26 million people to register as unemployed. But the worst could be yet to come as the closure only started in the last part of the first quarter.

"IT'S KIND OF INCREDIBLE WHEN YOU CONSIDER THAT THE ECONOMY WAS PRETTY NORMAL FOR OVER 80% OF THE FIRST QUARTER," SAID STEPHEN STANLEY, CHIEF ECONOMIST AT AMHERST PIERPONT SECURITIES LLC, "AT BLOOMBERG RADIO.

The worst quarter in history?

Kevin Hassett, a senior White House economic adviser, has predicted that US GDP could fall as much as 30 percent in the next quarter, reflecting the 2008 recession and the Great Depression of 1932, when the US economy grew 8.4% and $ 10.40 respectively 13% shrank, far overshadowed. According to the report , Goldman Sachs also expects unemployment to reach 15% by mid-2020, compared to just 4.4%

“THE US ECONOMY IS CURRENTLY IN RECESSION. WE JUST DON'T KNOW HOW DEEP IT IS, ”SAID GUS FAUCHER, CHIEF ECONOMIST AT PNC.

He also pointed out that the second quarter of 2020 could be much worse than the first, which could be "by far the worst quarter in history". Nevertheless, Faucher predicted that a strong upswing will follow once the pandemic is under control, even if the recovery process will not be as brilliant as the breakdown.

As Decrypt reported , large banks around the world are suffering massive losses as the coronavirus crisis continues. Just a few weeks ago, the International Monetary Fund's economic forecast found that the impact would be “far worse” than the 2008 financial crisis and “the worst recession since the Great Depression”.

What happens at Bitcoin?

Bitcoin has been correlating with the stock market for weeks and such a sharp crash could also cause the BTC price to suffer. Although the cryptocurrency picked up pace yesterday, investors could sell their crypto positions in another crash , as was the case in mid-March when Bitcoin dropped to a low of $ 3,600 in just 24 hours.