Bank of America: Cryptocurrencies Could Overtake Stocks Amid Possible Recession!
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Answer Bank of America: Cryptocurrencies Could Overtake Stocks Amid Possible Recession!
Michael Hartnett, chief investment analyst at Bank of America, indicated that bitcoin and other cryptocurrencies could outperform bonds and stocks in a possible recession.
In a recent note to him, he argued that the new policy of the US Federal Reserve could push the country and most of the world into such an economic state.
Cryptocurrency booming in the midst of an impending recession?
After years of trying to combat the consequences of the coronavirus pandemic with a boosted expansion of its balance sheet, which now stands at around $9 trillion, the US central bank changed its tune at the start of 2022.
This means that after more than doubling its balance sheet since March 2020, the Fed has decided to start reducing its balance, with some reports indicating that it may soon get rid of $95 billion in assets on a monthly basis.Read:Bitcoin hits 10-day high, total crypto market near $2 trillion
according to note Of the strategists at Bank of America, Reuters reported that the macroeconomic picture is rapidly deteriorating and could lead to a recession for the world’s largest economy.
Using strong words like:
- The inflation shock is getting worse.
- The price shock is just beginning.
- The next recession shock.
Hartnett warned bank clients that most assets would experience massive volatility.
While the performance of some, such as bonds and stocks, will be less than the performance of others.
In fact, many of the bank’s backed assets will come out on top amid a potential recession.
Bank of America’s Changing View of Crypto:
For those who follow the crypto industry and the general approach of Wall Street firms towards it, seeing Bank of America pick digital assets as the top potential performer can be very surprising.
In fact, it wasn’t long when Bank of America, along with countless other banking institutions, struck repeatedly against Bitcoin and the entire field.
Back in March 2021, Bank of America confirmed that Bitcoin is highly volatile, making it impractical as a store of wealth or a payment mechanism.Read:Opening of the first Bitcoin ATM in Britain
But then came the summer of 2021, and reports emerged that the bank had set up a cryptocurrency research team.
The shifting sentiment intensified days later when it became known that Bank of America had launched a bitcoin futures trading service.
Hence the large and rapid shift in the opinion of major traditional institutions towards Bitcoin and Bank of America is just an example.
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