How do global economic downturns or recessions specifically impact Bitcoin's price?

How do global economic downturns or recessions specifically impact Bitcoin's price?

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Global economic downturns or recessions often have a significant and sometimes unpredictable impact on the bitcoin price today. In typical recessionary environments, investors tend to become risk-averse, pulling capital from speculative assets and moving it into traditional safe havens like government bonds or even cash. Bitcoin, despite its "digital gold" narrative, has historically shown correlation with risk-on assets like technology stocks during periods of acute financial stress. This means that during a recession, Bitcoin's price can initially decline as investors de-risk their portfolios. However, some argue that in severe cases of monetary policy expansion (like quantitative easing to combat recession), Bitcoin's fixed supply could make it an attractive hedge against inflation, potentially leading to a rebound or even a surge as a non-sovereign asset. The overall impact depends heavily on the nature and severity of the downturn and the prevailing sentiment towards traditional financial systems.