Willy Woo, a notable analyst in the cryptocurrency arena, has cautioned that the forthcoming bear market could be particularly harsh, potentially spurred by a downturn in the business cycle—an occurrence that the crypto world has yet to experience.

He articulated that this upcoming decline will likely be marked by cycles previously overlooked. “The next bear market will be defined by another cycle people forget about,” Woo stated.

He noted that earlier, two cycles were typically superimposed, influenced by Bitcoin’s halving events occurring every four years and the global M2 money supply.

According to Woo, the past significant business cycle downturns occurred in 2001 and 2008, before the establishment of cryptocurrency markets. He expressed concern over how Bitcoin would perform during such an economic downturn.

“If we get a biz cycle downturn, like 2001 or 2008, it will test how BTC trades. Will it drop like tech stocks or will it drop like gold?”

A business cycle downturn denotes a phase of economic contraction characterized by decreasing GDP, rising unemployment, falling consumer spending, and reduced business activity, often referred to as a recession.

Woo emphasized that crypto markets are not isolated and will be impacted by these wider economic cycles, particularly through their influence on liquidity.

The downturn observed in 2001, known as the “dot-com bubble,” led to a significant rise in unemployment and a dramatic 50% decrease in U.S. stock markets (S&P 500) over a two-year span, instigated by the collapse of price-inflated tech companies. Similarly, the 2008 financial crisis resulted in a major contraction in GDP, a surge in unemployment, and a staggering 56% reduction in the S&P 500, linked to subprime mortgage failings, banking system failures, and a credit freeze.

The National Bureau of Economic Research (NBER) monitors key indicators—employment, personal income, industrial production, and retail sales—to identify recessions. Despite a brief uptick in early 2020 due to pandemic-induced lockdowns, current signs do not indicate a looming recession, though risks remain elevated.

Woo concluded that markets, being speculative, tend to price in forthcoming events, including M2 money supply dynamics. “Either BTC is saying to the global markets the top is in, or BTC is going to catch up,” he observed.