Main Points:
- U.S. Q1 2025 GDP shrank by 0.3%, the first quarterly contraction since early 2022, driven by a surge in imports ahead of tariffs.
- Equity markets plunged at the open, with the Dow down over 600 points and Nasdaq off more than 2%, before modest recoveries.
- FOMC rate‐cut expectations for June have risen sharply, with the probability of a 25 bp cut climbing from 59.8% to 64.2%.
- Bitcoin (BTC) price remained resilient at around $94,955 (+0.82% daily) despite traditional market volatility.
- Glassnode’s Bitcoin Accumulation Trend Score has jumped to 0.91, indicating heavy buying by large investors (“whales”).
- Institutional investors’ sustained accumulation signals confidence in Bitcoin’s long‐term outlook, even amid macroeconomic uncertainty.
- High accumulation rates among whales suggest continued bullish momentum for BTC over the medium to long term.
U.S. Q1 GDP Contracts by 0.3%, Marking First Decline Since Early 2022
In the first quarter of 2025, the United States economy unexpectedly shrank at an annualized rate of 0.3%, marking the first contraction since Q1 2022. This downturn surprised economists, who had forecast modest growth of around 0.4%. A primary driver was a 41.3% surge in imports as businesses rushed to stockpile goods ahead of the implementation of broad new tariffs under the Trump administration. Because imports are deducted from GDP calculations, this front‐loaded import activity subtracted significantly—over five percentage points—from overall GDP growth. By contrast, exports rose by only 1.8%, insufficient to offset the import surge. Reduced government spending and heightened policy uncertainty also contributed to the contraction of economic output.
U.S. stock markets reacted sharply to the GDP miss. At the opening bell, the Dow Jones Industrial Average plunged by more than 600 points, while the Nasdaq Composite fell over 2%. Sector‐wide declines saw high‐beta stocks and growth‐oriented sectors lead the downturn, reflecting investors’ sudden shift to risk‐off sentiment. However, as trading progressed, a combination of bargain‐hunting and reassurances from policymakers helped stabilize prices, allowing major indices to claw back some losses by the close.
Rising Odds of Fed Rate Cuts
In the wake of the GDP data, market participants have dramatically revised their expectations for Federal Reserve policy. According to CME Group’s FedWatch Tool, the probability that the Federal Open Market Committee (FOMC) will cut its target range to 4.00–4.25% at its June meeting surged from 59.8% before the GDP release to 64.2% afterward. This shift reflects growing investor belief that the Fed will respond to slowing growth and tame inflation by easing monetary policy.
The stronger odds of rate cuts have important implications across asset classes. Lower interest rates typically reduce the opportunity cost of holding non‐yielding assets like gold and Bitcoin, bolstering their appeal as hedges against inflation and currency debasement. Furthermore, an easing cycle can encourage capital flows into risk assets, providing liquidity that supports asset price appreciation over time.
Bitcoin’s Resilience Amid Market Turmoil
Despite the sharp equity market sell‐off, Bitcoin demonstrated notable stability. At press time, BTC/USD was trading at approximately $94,955 per coin, up 0.82% on the day. This performance contrasts with broader risk assets and underscores Bitcoin’s evolving role as both a speculative asset and a potential inflation hedge.
Analysts note that Bitcoin’s decentralized nature and finite supply are increasingly valued in an environment of policy uncertainty. The perception that traditional markets may be entering a phase of lower returns has prompted some investors to diversify into digital assets. Moreover, the maturation of institutional infrastructure—such as regulated futures markets, ETF vehicles, and custody solutions—has reduced barriers to entry for large players, further supporting price stability.
Glassnode’s Accumulation Trend Score Surges to 0.91
On‐chain analytics firm Glassnode reports that the Bitcoin Accumulation Trend Score has climbed to 0.91, near its all‐time highs. This proprietary metric quantifies the proportion of network participants accumulating BTC, weighting both the size of their holdings and monthly balance changes on a scale from 0 (net distribution) to 1 (maximal accumulation). A score approaching 1 indicates that the largest cohorts—often institutional “whales” holding over 10,000 BTC—are aggressively buying and holding, signaling bullish conviction among the most capitalized investors.
Following the initial tariff‐driven price dip, Bitcoin found a strong footing, with short‐term holders capitulating and longer‐term holders stepping in. The rising Accumulation Trend Score suggests that despite headline news and macro pressures, market participants with substantial capital are increasingly confident in Bitcoin’s long‐term narrative. This accumulation behavior often precedes sustained uptrends, as selling pressure is absorbed by deep‐pocketed entities committed to holding through volatility.
Institutional Confidence and Market Maturity
Institutional interest in Bitcoin has grown markedly since late 2020. Asset managers, hedge funds, and corporate treasuries have publicly disclosed significant BTC positions, citing diversification benefits and potential upside in digital scarcity. Reports from Grayscale and Pantera Capital highlight that Q1 2025 saw record inflows into crypto funds, despite overall market volatility. This institutional participation provides not only capital support but also credibility for Bitcoin as a nascent asset class.
Standard Chartered’s recent research posits that Bitcoin remains undervalued relative to heightened systemic risks associated with elevated term premiums on U.S. Treasuries. The bank notes that if policy ambiguity persists, digital assets may attract greater allocations as investors seek uncorrelated returns. Combined with Glassnode’s on‐chain signals, these insights point to a maturing ecosystem where fundamental analytics and macro strategies increasingly inform allocation decisions.
Outlook: Sustained Bullish Momentum Likely
The convergence of macroeconomic drivers—slowing GDP, elevated recession concerns, and dovish Fed expectations—with robust on‐chain accumulation sets a favorable stage for Bitcoin’s medium‐ to long‐term performance. High accumulation rates among whales reduce available supply on exchanges, potentially amplifying price moves during periods of renewed demand. Additionally, the ongoing development of regulatory frameworks and institutional products may further broaden market depth and reduce volatility over time.
However, investors should remain mindful of short‐term price swings. Macro headlines, regulatory shifts, and liquidity events can trigger transient corrections. Effective risk management—such as position sizing, diversification, and strategic rebalancing—will be crucial as Bitcoin navigates its next major leg. Overall, the sustained accumulation by large investors underscores a growing conviction that Bitcoin will play an integral role in diversified portfolios, particularly in an era of uncertain economic policy.
The unexpected contraction of U.S. GDP in Q1 2025 has catalyzed a broad reassessment of risk and policy expectations, driving equity sell‐offs and ramping up rate‐cut probabilities. In this evolving landscape, Bitcoin has exhibited resilience, buoyed by its narrative as an alternative store of value and bolstered by heavy accumulation from institutional players. Glassnode’s Accumulation Trend Score, now at 0.91, signals that large investors are doubling down, potentially laying the groundwork for a continued bullish phase. While volatility remains intrinsic to digital assets, the combination of macro catalysts and on‐chain conviction points to a constructive outlook for Bitcoin over the coming months.
