According to analyst Willy Woo, the following crypto bear market could possibly be particularly brutal and driven by an economic downturn the likes of which crypto has never seen before.
The next bear market “will probably be characterised by a distinct cycle that individuals forget,” Woo said Monday.
He said that previously we had two cycles that overlapped one another based on the Bitcoin halving events every 4 years and the worldwide money supply M2.
“Central banks devalue the M2 money supply in four-year cycles [and] each overlap,” he said.
However, the following bear market will probably be determined by the economic cycle, Woo explained. The last downturns within the economic cycle that actually took hold were in 2008 and 2001, before crypto markets were invented, he said.
“If we see a business cycle like 2001 or 2008 downtown, that can test BTC trading. Will it fall like tech stocks or will it fall like gold?”
Economic cycles could have an effect on liquidity
An economic downturn is a period of economic decline through which GDP falls, unemployment rises, consumer spending declines, and business activity slows. It can be commonly known as a recession and typically follows periods of recovery.
Woo's argument is that crypto markets don’t exist in isolation and are influenced by these broader economic cycles, particularly their impact on liquidity.
The economic downturn of 2001, also often known as the “dot-com bubble,” caused unemployment to rise and the U.S. stock market (S&P 500) to say no by 50% in two years. The trigger was the collapse of overvalued technology corporations and excessive speculation.
In 2008, the “financial crisis” led to a pointy decline in GDP, an increase in unemployment, and a 56% decline within the S&P 500. The triggers were a subprime mortgage crisis, the collapse of the banking system and a credit freeze.
Bear market timing
The National Bureau of Economic Research (NBER) tracks 4 foremost indicators to detect recessions: employment, personal income, industrial production and retail sales.
There was a rise in early 2020 as a consequence of the pandemic-related lockdowns, nevertheless it was a particularly short recession. There is currently no immediate risk of recession, but the danger stays elevated.
This cycle has also been complicated by the imposition of trade tariffs, which have already dampened growth in the primary half of 2025 and are expected to proceed to weigh on GDP growth in the primary half of 2026.
Historical business cycles and recessions. Source: NBER
