The World Bank predicts the slowest global economic growth in 17 years – a mere 2.3%. This is significantly lower than the 2.7% seen in 2024 and only slightly better than a full-blown recession. Many developing nations are already teetering on the brink of recession.
Trade Wars and Slowing Growth
The World Bank blames trade disputes, especially tariffs (particularly those imposed by the US), for much of the slowdown. Global trade growth has been steadily declining:
- 2000s: 5.1%
- 2010s: 4.6%
- 2020s: 2.6%
- Projected 2025: 1.8%
These tariffs act as major roadblocks to international trade, increasing geopolitical risks and discouraging investment. Even major economies like the US and the Eurozone are experiencing sluggish growth. The World Bank warns of a prolonged slump without coordinated action.
Developing Nations Hit Hardest
Developing countries are suffering the most. Nearly two-thirds are growing slower than their average over the past 10 years. Many face debt crises, low investment, and inflation, all while their populations are rapidly growing. Over half of low-income countries are at high risk of debt distress.
Bitcoin’s Unexpected Strength
Despite the gloomy economic outlook, Bitcoin is thriving. It’s surged over 54% in the past year, reaching a market cap of around $2 trillion. While still smaller than gold’s $23 trillion market cap, its parallel rise with gold is noteworthy. Both are seen as safe havens during economic uncertainty.
Increased institutional adoption, successful Bitcoin ETFs, and corporate treasury strategies are all contributing to Bitcoin’s growth. It’s increasingly viewed as a hedge against inflation, slow growth, and systemic risk. Interestingly, adoption is strong even in developing countries most vulnerable to economic downturns.
Preparing for the Future
While Bitcoin can’t single-handedly fix the global economy, it could play a crucial role as a store of value. With central banks facing limitations due to high debt and inflation, investors are seeking alternatives. Bitcoin’s potential to rival, and even surpass, gold’s market cap is a significant possibility.
This information is for educational purposes only and is not financial advice. Do your own research.
