Bitcoin quickly rebounded above US$21,000 coming into Asian trading hours on Wednesday after falling below the mark overnight since the International Monetary Fund (IMF) cut its global growth outlook for this year and next, warning that the world economy may soon be on the cusp of an outright recession.

See related article: IMF says crypto crash hasn’t quite harmed broader financial system

Fast facts

  • Bitcoin was trading at US$21,202, while Ethereum was changing hands for US$1,447.58 in late afternoon trade in Hong Kong, according to CoinMarketcap data.
  • In its most recent World Economic Outlook report, the IMF said the world’s three largest economies, the U.S., China and the Eurozone, were all stalling.
  • The international body pointed to higher than anticipated global inflation, supply chain disruptions due to ongoing Covid-19 outbreaks in China and continuing negative spillovers from the war in Ukraine as major contributing factors to the economic uncertainty.
  • The updated guidance from the IMF expects the global economy to grow by 3.2% in 2022 and just 2.9% in 2023 — 0.7% lower than it had slated in its April world economic outlook.
  • “The IMF has consistently been downgrading its forecasts,” Andrew Sullivan, a market analyst and former equities broker, told Forkast in an interview, adding: “I don’t think people are hugely surprised that they’ve cut their forecasts again or that they’ve [predicted an] increased risk of recession.”

See related article: Why the IMF is wrong about El Salvador’s Bitcoin experiment