How Much of Bitcoin's 2025 Momentum Is Being Driven by Fundamentals?

The global economy in 2025 is walking a tightrope. The deliberate reengineering of trade rules by the U.S. has created a new layer of uncertainty

How much of Bitcoin’s 2025 momentum is being driven by fundamentals, and how much by macro systems that no longer offer reliable direction? A closer look at the changing liquidity tides, new tariffs, and outlook on Bitcoin price.

The global economy in 2025 is increasingly fragile as a new layer of uncertainty is being added with the U.S. making sweeping changes to trade rules. These changes may spark a recession sooner than anticipated, which has central banks, corporations, and policymakers on high alert.

President Trump’s administration has been rolling out a series of trade policies, including 145% tariffs on Chinese goods and a broad import tax that could effectively raise the average effective U.S. tariff rate by roughly 16 percentage points.

These changes are part of a broader realignment of the post-globalization playbook, with Washington shifting its stance on trade, immigration, climate policy, and foreign aid to create a new economic sphere.

However, these changes are also increasing the odds of a recession. According to Goldman Sachs, the chances of a U.S. recession over the next twelve months have risen to 45%, while the projections for 2025 have been slashed.

Earlier this year, Goldman had predicted a modest slowdown in late 2024 or early 2025, with economists anticipating a brief period of negative growth. But with the rapid shifts in trade policy and their downstream impact on manufacturing costs, goods prices, and consumer spending, that calculus has changed.

As a result, Goldman has now slashed its forecast for U.S. GDP growth in 2025 to just 0.5%, a stark reduction from the 1.4% it had projected previously.

Its economists also expect unemployment to tick up to 4.7% by the fourth quarter of 2025, an increase from the 3.7% prediction in the prior report.

On the other hand, they see core PCE inflation holding at 3.5%, remaining above the Federal Reserve’s 2% target despite three broad-based interest rate cuts from the central bank.

Those cuts, which analysts have described as “insurance cuts” to cushion the economic impact of tariffs, are expected to be delivered by the fourth quarter of 2025. But with the labor market still showing strength and inflation remaining sticky, the Fed’s scope for action is limited.

Its actions will also largely depend on the broader macroeconomic trends, which are becoming less clear.

Japan's economic outlook has deteriorated due to slower external demand and increasingly cautious corporate investment, leading to lower forecasts for GDP growth in 2025 and 2026.

The forecasts for Japan’s GDP growth in 2025 and 2026 have been slashed to 1.0% and 0.7%, respectively, a significant reduction from the previous predictions of 1.5% and 1.2%.

This change is a consequence of the slower-than-expected recovery in external demand and the more sluggish pace of capital expenditure by Japanese companies.

As a major export-driven economy in the region, Japan is largely affected by any disruptions in the global economy, rendering it particularly vulnerable to the implications of a potential U.S.-led recession.

The Bank of Japan had been preparing to raise interest rates this year as it begins to exit an era of ultra-low monetary policy. However, the possibility of a recession may now force the bank to delay or abandon those plans.

In the eurozone, economists at Goldman Sachs have revised down their outlook for 2025. They now anticipate the common currency bloc’s GDP to expand by 0.7%, a reduction from the 1.0% growth that was predicted in January.

The revised outlook is attributed to weaker-than-expected economic activity in the first quarter of 2025 and the anticipation of a more sluggish recovery in the second half of the year.

The economists have also lowered their outlook for inflation in the eurozone and adjusted their terminal rate expectations for the European Central Bank accordingly.

They now see the CPI, a broad measure of inflation, coming in at 2.0% by the fourth quarter of 2025, down from the previous estimate of 2.2%.

Correspondingly, they have reduced their terminal rate expectations for the ECB to 2.0%, a slight decrease from the previous estimate of 2.1%. This anticipates that the ECB will need to raise rates by a smaller amount to contain inflation within its 2% target.

The British economy is also expected to face a bleaker outlook in 2025, with economists at Goldman Sachs slashing their GDP growth forecast.

The new prediction stands at 0.2%, a significant reduction from the 0.8% growth that was anticipated at the beginning of