For JP Morgan, it’s time to sell bitcoin
The global chief strategist of JP Morgan Asset Management advised investors to focus on value stocks, sell cryptocurrencies and avoid Bitcoin.
You must stay away from Bitcoin and cryptocurrencies, according to JP Morgan
David Kellythe global chief strategist at JP Morgan Asset Management, said investors should offload their investments in cryptocurrencies, Bloomberg reports.
The JP Morgan analyst’s prediction came after Fed chairman Jerome Powellhis speech on 26 August which appeared to lead to further interest rate hikes to combat rising inflation.
Kelly urges investors to move against shares with a high value increase and don’t think short-term for your investments, but rather medium- to long-term:
“The economy has one foot in recession and the other on the banana peel now. Be sure to overweight US and international stocks, as well as stocks with relatively low price-to-earnings ratios.”
These recommendations of his are mainly driven by Powell’s speech in Jackson Hole, which spoke about the need to continue with high interest rate policy to counter inflation, after the two consecutive 75 basis point increases made in the last two Federal Reserve meetings:
“The Federal Reserve overestimates the strength of the US economy because they feel guilty that inflation has risen on their watch.”
On the other hand, Powell’s words left little room for imagination and resulted in sharp falls in major US indices:
“We are taking strong and swift steps to moderate demand so that it comes more in line with supply, and to keep inflation expectations anchored. We will continue to do so until we are sure the job is done.”
For this reason, the JP Morgan analyst said it would be better to focus on value shares or the long-term bond and avoid speculative products such as cryptocurrencies.
Kelly stated:
“Make sure you overweight US and international stocks, as well as stocks with relatively low price-to-earnings ratios.”
Inflation and the American Economy
Edward Moyathe senior market analyst at Oanda, said in a recent email that such an aggressive approach by the Fed could also trigger an economic downturn.
And about Bitcoin, he stated that:
“Bitcoin weakened after Fed Chair Powell missed his reiteration that the Fed will tighten policy to bring down inflation. Risky assets struggle as Powell’s fight against inflation will remain aggressive even if it will trigger an economic slowdown.”
On the other hand, JP Morgan’s CEO has warned in recent days about the risk of a real hurricane coming on the financial front, urging investors to prepare for the worst.
Despite this, however, some analysts are convinced that after Powell’s words, Bitcoin may have found a place to start anew. Oanda’s Edward Moya himself believes that Bitcoin, despite the risks associated with the economy, may have found its low point from which to start again. While John ToroThe Chief Investment Officer for Digital Assets at Independent Reserve believes that not Ethereum, but the entire cryptocurrency market, could be positively impacted by the upcoming Merge update, which will bring the Proof of Stake consensus method to the Ethereum blockchain.
