Recession is Here! Now What?

All it takes for a technical recession is two consecutive quarters of negative GDP growth. Well, guess what - Q1 of this year was negative for US GDP, and if you think Q2 is going to be positive, then you’re one of life’s optimists.

The good news - if you can call it that - is that by the time a US recession has been confirmed, the economy could in fact be on its way out of it. But, how exactly is this recession going to manifest itself? How will it affect all of us? And is it going to mean a little discomfort, or a whole load of pain?

In today’s video, we unpack a recent report by a major asset manager which seeks to answer these questions and more besides. It gives a great overview of what the US economy is facing and how it might react as the impact of Trump’s tariffs begins to be felt by businesses and consumers alike.

You can watch that video here.

📈 Crypto Market Forecast 📈

It’s going to be a big week. That’s because the Fed will be announcing its next interest rate decision on Wednesday. With inflation declining, the economy contracting, and unemployment rising, the Fed should at least signal that it’s going to cut interest rates. Unfortunately, this is unlikely for one simple reason: there is still lots of uncertainty around tariffs.

This is likely to create lots of volatility in the markets, because said markets have been signalling to the Fed that it needs to cut rates. This is being done via the yield on the two-year treasury, which is seen as the market’s way of guiding the Fed’s policy. The fact that the two-year yield is lower than the Fed’s current rate tells us the Fed’s current interest rate is too high.

If the Fed ignores this signal at its meeting on Wednesday, then the markets could dip as any hopes of easing are dashed. On the flipside, inflation should continue declining, the economy should continue contracting, and unemployment should continue rising. As this data continues to come out, the odds of a Fed cut will start rising again, potentially taking markets higher. The next date to watch in this regard is May 13th, when the next CPI print comes out.

The catch is that the Fed isn’t the only major player on the macro board. As many macro analysts like Lyn Alden have pointed out, we’ve been in a regime of fiscal dominance since the start of the pandemic. In practical terms, this means that we need to pay closer attention to the Treasury Department. As it so happens, the Treasury now has $600 billion that it’s ready to spend.

This is all thanks to tax season, which was larger than the year prior thanks to the sizable returns in the stock market last year. The result is that the Treasury has more than double the amount of runway it did during the last debt ceiling debate in 2023. This means that the current debt ceiling debate could last until August or even September, as many media outlets have reported.

If you’ve been keeping up with our coverage of US debt, you’ll know that the debt ceiling debate is acting as a timer for how long the Trump administration has to get its ducks in a row. It needs to cut spending, boost GDP, and lower energy prices by August-September in accordance with Scott Bessent’s 333 plan. Let’s just say things aren’t exactly going as Scott would wish, especially with GDP.

Fortunately, Scott seems to have a trump card up his sleeve (pun intended). This is to expand the Treasury’s bond buyback program to basically do the quantitative easing they want the Fed to do. For context, the bond buyback program was originally intended to buy older bonds, which are less liquid, and replace them with newer bonds, which are more liquid. This was historically done using bonds of the same duration, so replacing old 10-year bonds with new 10-year bonds.

However, many macro analysts have speculated that the Treasury could start doing something unprecedented, and that’s issuing new short-term bonds to buy older long-term bonds. The recent announcement makes it sound like the Treasury could do exactly that. There’s just one small problem, and that’s who will buy all these new short-term bonds the Treasury has to sell.

Well, if you’ve been keeping up with our coverage of US debt, you’ll know we believe that stablecoins could be part of the answer. For reference, stablecoins are backed primarily by short-term US government debt. Stablecoin regulations could be passed as soon as the end of this month, and there are large TradFi players looking to get involved when stablecoins launch.

This means that over the next few months, we could see the Fed cutting interest rates while the Treasury does de facto QE. Assuming the tariff turmoil has calmed down, then it would be the perfect macro backdrop for risk assets to rally. Crypto-specific catalysts would finally start to matter again, and there’s no shortage of those coming up, as we noted in a recent video.

In sum then, this week is likely to be quite volatile for crypto, likely to the downside. By the end of the month, however, markets should start to recover, assuming the macro plays along. Let’s hope it does.

💲 Payment Revolution 💲

A couple of weeks ago, Dragonfly investor Omar posted a tweet that highlighted the inefficient global coverage of traditional remittance services like Wise. The image attached in the tweet showed Wise’s lack of two-way remittance support for all of Asia, Africa and parts of South America. Omar suggested this apparent lack of coverage, despite Wise’s status as a $10B public company, was the reason why stablecoin remittances and payments would continue to eat the market share of traditional remittance services.

While many echoed the insights of the post, a few X users pointed out one flaw with the argument. Critics argued the utility of stablecoin remittances were ultimately bottlenecked by the lack of onramps and offramps for crypto in many of the countries not covered by Wise. One user noted that sending USDC to his rural Indian cousin involves multiple steps—transferring to an exchange, selling for INR, withdrawing to a bank, and navigating KYC, fees, and bank flags. By contrast, Wise delivers rupees directly to the recipient’s bank account for $7.33 (vs. $11.51 via stablecoins for $1,000). In other words, it was simply impossible for his cousin to automatically use the stablecoins in his wallet for everyday payments.

For the most part, this criticism is valid. Though we have to point out that services like CopperX and Bitrefill have abstracted some of these inefficiencies for payments in business and commerce-related transactions in countries like India. That said, it's still true that using stablecoins for everyday transactions is a cumbersome process in India and elsewhere. Most importantly, despite the rise of new solutions every day, most people either lack the awareness of these products, or are hesitant to use them. In other words, for stablecoin payments to truly go mainstream, there needs to be a push for solutions from incumbent giants in the traditional finance industry. After all, payment flows are all about workflows and regulatory compliance. TradFi incumbents already have the necessary relationships and years of experience to give us a real shot at taking stablecoin payments mainstream.

Thankfully, we’re beginning to see some big developments on this front. Over the past week, payment network giants Mastercard and Visa both announced stablecoin-related products and partnerships. In the case of Mastercard, it partnered with payment processor Nuvei and stablecoin issuers Circle and Paxos to allow merchants across its network to be paid with stablecoins, regardless of how the customer chooses to pay. Not to mention, Mastercard Move allows these merchants to withdraw these stablecoins into their bank accounts at any time. It also announced a partnership with crypto exchange OKX to create a crypto-enabled bank card that allows users to spend the stablecoins in their crypto wallets at the over 150 million merchant locations accepting Mastercard globally.

In the case of Visa, it announced a partnership with Stripe’s Bridge platform, allowing developers to issue stablecoin-linked Visa cards in Argentina, Colombia, Ecuador, Mexico, Peru and Chile. While the initial rollout is focused on the LATAM region, Visa has confirmed its intention to expand to other regions in the future. The Visa cards will allow cardholders to make stablecoin payments to any merchant location that accepts Visa. In the backend, Bridge deducts funds from the cardholder’s stablecoin balance and converts the balance into fiat so the merchant gets paid in their local currency. Notably, Visa’s focus on LATAM aligns with the region’s demand for stablecoin solutions, as most businesses in Brazil and Mexico appear to use stablecoins for cross-border trade.

On that note, crypto incumbents aren’t just sitting on their hands. Notably, in a move set to compete with both Mastercard and Visa, stablecoin issuer Circle announced the launch of the Circle Payments Network (CPN) - a new payments and cross border remittance network. This will reportedly enable real-time settlement of cross-border payments using regulated stablecoins and connected financial institutions. The network already includes over 20 partners, including World Remit, Yellow Card, and Fireblocks. It also has advisory support from major banks like Standard Chartered and Deutsche Bank.

That said, the future of stablecoin-enabled payment rails is more than just simple payments. We believe this presents an opportunity to explore a more capital efficient payment system. For instance, the possibility of accruing yield on the stablecoin deposits within your Mastercard- or Visa-integrated stablecoin wallets. We’re already seeing the proliferation of similar products within DeFi platforms.

For example, popular DeFi analytics platform DefiLlama’s new subscription feature allows users to pay for the subscription using yield from the funds deposited on the platform. Essentially, DefiLlama deposits user funds on Aave to generate what’s needed for the monthly subscription. As long as the yield generated by the deposit is greater than the subscription cost, the user can access the platform at effectively no cost. If the yield generated by the deposit is lower than the subscription cost, the subscription fee is effectively discounted by the yield generated. Users can withdraw their deposits at any time, making this payment flow highly capital efficient. If this sounds interesting, we recommend you check out protocols falling within the PayFi narrative.

Admittedly, for these PayFi processes to be integrated within mainstream finance, the first order of business is to receive regulatory clarity on yield-bearing stablecoin assets. Until we see development on this front, PayFi-enabled payment cards are a risky endeavour. Thankfully, we expect the first US stablecoin bill to be passed into law sometime this year. In other words, there’s still time to find and back the next potential supergiant to come from the stablecoin payments space.

🔥 Hot Deal Of The Week 🔥

It’s been a rough year for most crypto holders. However, there are some people that are making money and those are the traders.

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🔮 Video Pipeline 🔮

* Google Breakup: Impact on Silicon Valley & crypto!
* Coinbase Report: Market sentiment, ETF flows & key metrics to pay attention to!
* Alarming Apollo Report: Trump could trigger a recession soon!
* Microstrategy Liquidation: Michael Saylor’s Bitcoin-powered transformation of Micro!

🏆 What's New at CoinBureau.com This Week? 🏆

* Ledger Nano S, Stax & Flex Compared: Features, Security & Value
* Reviewing PropW: Features, Fees & Payouts
* AI Trading Bots Explained: Top Features, Benefits & Risks
* Crypto Trading Orders: Types, Use Cases, and Strategies
* Compare The Top 10 Crypto Hardware Wallets In 2025

📖 Quote of the Week 📖

The only investment that you can make which is more valuable than bitcoin is levelling up on your crypto education.

“An investment in knowledge pays the best interest” - Benjamin Franklin

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.