Germany is heading for a recession; the impact on Bitcoin investors

The German economy is on the way to its first recession since the pandemic. The gross domestic product (GDP) of the “engine room of Europe” fell by 0.3% in the last quarter of 2023.

What does it mean for Bitcoin (BTC) price that Germany is starting to become the “sick man” of Europe? Do we need to worry?

Why is Germany in trouble?

Germany is a heavily export-dependent economy and is currently suffering from weak demand from abroad, high interest rates from the European Central Bank, the loss of Russian energy supplies and of course geopolitical tensions.

It is not for nothing that we call Germany the “factory” or “engine room” of Europe. Germany is a country known for its strong industry. It is precisely this industry that is currently in crisis.

This was also revealed yesterday by a new study, which showed that the number of “new orders” fell even further than expected.

Source: S&P Global/Bloomberg

The German Bundesbank even assumes that GDP will fall even further in the first quarter.

That would theoretically plunge the German economy into recession and could create great uncertainty in a country already plagued by excessive bureaucracy, an aging population and a lack of investment in infrastructure and key technologies.

What does this mean for the Bitcoin price?

A recession is never good for the price of Bitcoin, and especially not when it affects a major Western economy. Bitcoin is very popular in Germany and this could theoretically take some of the demand for Bitcoin out of the market.

On the other hand, problems in Germany could lead to the ECB changing course more quickly and starting to cut interest rates much earlier. Ultimately, the German economy is crucial for the Eurozone.

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While nothing seems to be happening in America, people in Europe are now starting to feel the pain of the ECB’s aggressive interest rate hikes.

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