Market Wrap: Bitcoin Pushes Higher Despite Negative GDP Report

Growth in the U.S. economy slows, the yield curve inverts but markets rise anyway.

AccessTimeIconJul 28, 2022 at 9:06 p.m. UTC
Updated May 11, 2023 at 4:56 p.m. UTC
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Bitcoin’s (BTC) price continued its ascent in Thursday trading, rising 4% despite a negative U.S. gross domestic product (GDP) report.

The quarterly growth rate declined 0.9% relative to estimates for a 0.5% increase. The decrease marks the second consecutive quarter for negative GDP growth, which historically has signaled an economic recession.

This article originally appeared in Market Wrap, CoinDesk’s daily newsletter diving into what happened in today's crypto markets. Subscribe to get it in your inbox every day.

Officially the National Bureau of Economic Research determines when the U.S. has entered recession, dependent on a range of factors.

Following the Thursday report, yields of U.S. Treasury notes declined, with the yield on 10-year notes surpassing yields on two-year notes. Bond yields have an inverse relationship with prices, meaning when one rises the other falls. When Treasury bond yields fall, it implies the notes are being purchased. Investors often purchase the safer Treasury bonds (rather than stocks or crypto) when they doubt the strength of the overall economy.

In traditional equity markets, the S&P 500 and the Dow Jones Industrial Average increased by 1.2% and 1.1%, respectively.

Ether’s (ETH) price increased as well on Thursday, rising by another 9% following Wednesday’s 16% jump.

Altcoins were in positive territory, too, with Cosmos’ ATOM token jumping by 8% while Polkadot’s DOT rose by 9%.

Latest prices

Bitcoin (BTC): $23,900 +4.4%

Ether (ETH): $1,742 +7.8%

S&P 500 daily close: 4,072.43 +1.2%

Gold: $1,774 per troy ounce +3.2%

Ten-year Treasury yield daily close: 2.68% −0.05

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at

Does Potential Trouble for the US Economy Signal Higher Asset Prices?

By Glenn Williams Jr.

Bitcoin continued to move higher on Thursday, pushing past $23,000, despite a GDP report that showed second-quarter decline rather than growth. The negative 0.9% reading follows last quarter’s 1.6% decline and missed projections for a 0.5% increase in growth. Still, asset classes across the board responded favorably, with prices in both traditional finance and cryptocurrencies moving higher as investors saw evidence the economy is slowing at a slower, more desirable rate instead of plunging into recession.

Bond markets were more skeptical, with the yields for the two-year Treasury note surpassing yields for the 10-year Treasury note, resulting in an inverted yield curve. An inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. The purchase of Treasury notes is essentially a loan to the U.S. government with the expectation the loan will be paid back with interest (i.e., the yield rate).

When the yield for a two-year loan is higher than the yield for a 10-year loan, bond markets require a higher rate of interest for a short-term loan than they would for a longer-term loan.

Historically in the U.S., such scenarios have been a precursor to recession. The below image shows the spread between yields on the 10-year and two-year Treasury notes, and how the spread has been in decline since March of 2021. Shaded regions indicate areas of recession, which have historically occurred 12-18 months following inversion.

10-year Treasury bond constant maturity minus 2-year Treasury bond constant (Federal Reserve Bank of St. Louis)
10-year Treasury bond constant maturity minus 2-year Treasury bond constant (Federal Reserve Bank of St. Louis)

The higher asset prices in the aftermath of negative economic data suggest that markets expect the Federal Reserve to take a milder approach to reducing inflation, and may put policies in effect that are favorable to asset prices.

Meanwhile, a Commitment of Traders (COT) report is showing signs that speculators are adding to long bitcoin positions. The report provides a weekly snapshot of positions held by traders in futures markets and is published by the Commodity Futures Trading Commission (CFTC).

The positions of small speculators are denoted in blue (see below), while the positions of “large speculators” (i.e., asset managers) are denoted in green. Beginning around July 11, the COT report shows that small speculators are net long BTC because they’ve breached the center line (0.0), thereby moving into positive territory.

In the past, small and large speculators have often been opposite each other (i.e., October 2021), with institutions likely to be short BTC when retail investors are long.


Options markets have been giving bullish BTC signs as well, for the moment. When looking at BTC by strike price there is a large concentration of call option volume, and open interest at the $25,000 price level. For context, a call option gives the purchaser the right but not the obligation to buy BTC at a specific price level (the strike price). The existence of significant volume at a strike price above the current price can be viewed as an indication of bullish sentiment.


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Relevant insight

Other markets

Biggest Gainers

Asset Ticker Returns DACS Sector
Loopring LRC +11.6% Smart Contract Platform
Solana SOL +10.2% Smart Contract Platform
Cosmos ATOM +9.3% Smart Contract Platform

Biggest Losers

There are no losers in CoinDesk 20 today.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.


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Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX

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