After the announcement that the US Federal Reserve is stepping up its efforts to combat inflation and refuting any discussion of monetary policy easing, a strategist for JPMorgan advised investors to liquidate Bitcoin and other cryptocurrencies. For those who are concerned about the future of the cryptocurrency sector, JPMorgan’s chief global strategist, David Kelly, has offered some suggestions.
Kelly said in an interview published on Friday that the greatest strategy for positioning oneself at the present time is to focus on values rather than short-term direction, in response to comments made by Federal Reserve Chair Jerome Powell in Jackson Hole, Wyoming.
The economy is currently teetering on the brink of a recession. Make sure your portfolio has a large weighting in value equities, both domestic and foreign, and stocks with a low price-to-earnings ratio.
Kelly Advises Selling Digital Currency
Concerns about tighter monetary measures to battle inflation, which has reached the highest levels in forty years, have led to major declines in both traditional and crypto markets since the beginning of the year. For this reason, a recession is setting in.
Recently, Bitcoin dropped below $20,000 for the first time since mid-July as risk aversion increased in response to Powell’s comments that interest rates may need to remain high to limit inflation. Kelly recommends that investors keep their money away from large-cap tech stocks, Bitcoin, and cryptocurrencies in general. The likelihood of a recession and increased volatility are two things he is expecting.
However, by the end of next year, the expert predicts that the economy will be back to normal. Furthermore, Kelly said
Since inflation has increased while under the Fed’s watch, the central bank is trying to cover up its culpability by claiming the economy is stronger than it actually is.
The strategist at JPMorgan has recently advised clients to liquidate their Bitcoin and other crypto holdings.
There will be further difficulties for risky assets.
As Powell pursues a tight monetary policy in an effort to combat inflation, many market observers anticipate riskier assets will continue to struggle. A recent email from Oanda’s senior market analyst Edward Moya warned that this aggressive technique could trigger a recession.
The value of bitcoin dropped as Fed Chair Powell reiterated the central bank’s intention to tighten monetary policy in order to reduce inflation. While Powell’s hardline anti-inflation stance may cause the economy to stall, risky assets are suffering as a result.