According to analyst Willy Woo, the upcoming crypto bear market may be particularly severe, influenced by a business cycle downturn unprecedented in the cryptocurrency space.
On Monday, Woo stated that the next bear market “will be defined by another cycle people forget about,” said Woo.
He noted that past cycles have primarily revolved around Bitcoin halving events every four years and the M2 global money supply.
“Central banks inject M2 debasement in four-year cycles [and] both superimpose,” he explained.
However, Woo clarified that the next bear market will be dictated by the business cycle. The previous significant business cycle downturns occurred in 2008 and 2001, prior to the creation of crypto markets.
“If we experience a biz cycle downturn akin to 2001 or 2008, it will challenge how BTC performs. Will it decline like tech stocks or behave more like gold?”
Impact of Business Cycles on Liquidity
A business cycle downturn refers to a phase of economic contraction where GDP drops, unemployment rises, consumer spending decreases, and business operations slow down. Often termed a recession, this phase typically follows periods of economic expansion.
Woo emphasizes that crypto markets are not isolated entities and are subject to influences from larger economic cycles, especially concerning liquidity.
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The 2001 downturn, known as the “dot-com bubble,” was marked by rising unemployment and a 50% decline in the US stock markets (S&P 500) within two years, sparked by the collapse of overvalued tech firms and rampant speculation.
In 2008, the “financial crisis” resulted in significant GDP contraction, rising unemployment, and a 56% tumble in the S&P 500, triggered by the subprime mortgage crisis, banking system collapse, and a credit freeze.
Timing of Bear Markets
The National Bureau of Economic Research (NBER) monitors four primary indicators to determine recessions: employment, personal income, industrial production, and retail sales.
There was a spike in early 2020 due to lockdowns related to the pandemic, but it was a notably brief recession. Currently, there is no immediate recession threat, although the risk remains elevated.
This cycle has also been complicated by the introduction of trade tariffs, which have already curtailed growth in the first half of 2025 and are projected to continue to affect GDP growth through the first half of 2026.
Woo concluded that markets are speculative, implying they factor in future events, including M2 money supply. “Either BTC is signaling to global markets that the top is in, or BTC is poised to catch up,” he commented.
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