Bloomberg warns of financial crisis: Will it boost Bitcoin and other altcoins?

Bloomberg's editorial board has warned of a potential financial crisis similar to what happened in 2008/2009 that could occur this year as geopolitical risks rise In an article, the council warned that such a crisis could be triggered by large amounts of money held in the debt market. As business and consumer confidence declines and recession risks increase, they argue that lenders may start asking for more mortgage cash. The council also warned that the United States has high financial leverage, with public debt soaring to more than $36.8 trillion. Total corporate debt has risen to a record high of more than $13.7 trillion, while households hold more than $18 trillion. Bloomberg warns that banks and other lenders don't have the resources to absorb these potential losses. The concern is that the next financial crisis could be worse than those that occurred during the pandemic and the 2008 financial crisis. The warning comes as the U.S. has alienated allies by imposing tariffs. The U.S. has even raised tariffs on goods from China to 145%, raising the risk of a recession. Polymarket traders are currently offering a 65% recession rate this year. A major financial crisis could benefit Bitcoin and altcoins An economic downturn or financial crisis will hurt Bitcoin ( BTC ), altcoins, and the stock market initially as fears grow. It will also lead to higher unemployment in the economy. However, history shows that these risky assets often perform well after major crises caused by the Federal Reserve and government interventions. The Fed cut interest rates to zero during both the global financial crisis and the COVID-19 pandemic. After that, the Fed implements quantitative easing, prints money and injects liquidity into the economy. In parallel, the federal government provided a $700 billion bailout to banks during the global financial crisis (GFC) and issued trillions of stimulus checks during the pandemic. These actions helped trigger a strong rally in both stocks and cryptocurrencies. US indices such as the S&P 500 and Nasdaq 100 entered a bull market after the global financial crisis. Similarly, Bitcoin, altcoins and stocks soared following COVID-era interventions, before falling when the Fed began raising interest rates in 2022.