Top Economist Forecasts Bitcoin Surge Before Upcoming Recession
Henrik Zeberg, the Head Macro Economist at Swissblock, has reiterated his forecast that a recession in the United States is unavoidable, although he predicts that it will be preceded by a remarkable surge in financial markets, particularly a significant rally in Bitcoin, which he anticipates will reach prices between $115,000 and $120,000. In his recent analysis shared on platform X, Zeberg elaborated on the cyclical characteristics of markets, considering historical economic indicators alongside the current monetary policies in place.
In his communication, Zeberg reminded his audience, “Remember? In December 2022, everyone was bearish! I was bullish! We were warned of an ‘imminent crash’ even though the market had already bottomed out in October 2022.” He subsequently outlined his refined predictions for prominent market indices in addition to Bitcoin, forecasting a forthcoming phenomenon known as a “blow-off top.”
The term “blow-off top” refers to an abrupt increase in asset prices within financial markets, often followed by an equally sharp retraction. This phenomenon typically arises from fervent buying activity that escalates prices to unprecedented levels, often fueled by speculative or exuberant behavior from traders. However, such price surges are generally considered unsustainable, eventually leading to substantial sell-offs as market participants seek to realize profits or respond to overbought conditions.
Zeberg posits that the impending blow-off top may be ignited by the US Federal Reserve’s substantial liquidity injections aimed at staving off a recession. He predicts significant gains for major indices, projecting the S&P 500 to climb to between 6,100 and 6,300, the Nasdaq to reach between 24,000 and 25,000, the Dow Jones Industrial Average to approach approximately 45,000, and Bitcoin to attain valuations between $115,000 and $120,000.
Zeberg’s optimistic perspective sharply contrasts with his grim expectations for the period following this anticipated rally. He warns, “We are not at the top—yet! However, a recession is on the horizon, and it is projected to be the most severe since 1929. We anticipate a major bear market, occurring in two phases: first, a deflationary phase followed by stagflation, broken up by a temporary rebound as the Federal Reserve intervenes in 2025.” This outlines the economist’s complex view of an impending recession influenced by monetary policy and market dynamics.
Zeberg’s skepticism regarding the potential efficacy of forthcoming Federal Reserve interest rate reductions stems from a critical analysis of historical precedents. While market expectations suggest a 25 basis point cut at the next Federal Open Market Committee (FOMC) meeting—support from 73.5% of market participants according to the CME FedWatch tool—he remains skeptical that these measures alone will mitigate impending recessionary pressures. “The global economy is fracturing. The US recession is expected to commence in December 2024,” Zeberg asserted. His analysis reflects a belief that short-term liquidity provisions are inadequate to address deeper economic troubles. He draws attention to liquidity cycle metrics that mirror conditions seen prior to the 2008 financial crisis.
Additionally, Zeberg references recent labor market data, notably the downward revision of total employment figures released by the US Bureau of Labor Statistics for March 2024 by 818,000, representing the largest adjustment in a decade and indicating significant labor market weakness beyond prior estimations. He comments, “The economy is much weaker than expected.” As of the time of writing, Bitcoin is valued at $60,764.
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