JPMorgan predicts something worse than recession, what does this mean for Bitcoin and cryptocurrencies?

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The banking giant of Wall Street, JPMorgan, has warned investors that something worse than a recession could be in the offing. The warning came from JPMorgan boss Jamie Dimon himself during a conference call with clients last week.

Speaking to bank clients, the JPMorgan CEO said storm clouds are coming. Citing some current macroeconomic hurdles in the US economy, Jamie Dimon believes the chances of something worse than a recession happening are 20-30%. The odds of a severe recession could come true if the Federal Reserve raises interest rates too quickly.

Jamie Dimon bases his arguments on the macroeconomic outlook and quantitative adjustment. The JPMorgan CEO said:

What’s out there? There are storm clouds. Rates, QT, oil, Ukraine, war, China. If I had to put quotas: 10% soft landing. Harder landing, mild recession, 20%, 30%. Harder recession, 20%, 30%. And maybe something worse between 20% and 30%. It is a serious mistake to say ‘here is my single point forecast’.

Earlier this year, in June 2022, Jamie Dimon made a similar warning. Be prepared for an “economic hurricane,” he said. His reference was to the high inflation rates the US is facing, which could lead to an aggressive stance by the Federal Reserve. World Bank President David Malpass also holds views similar to Dimon’s. malpass said:

The world economy is once again in danger. It faces high inflation and slow growth at the same time. Even if a global recession is averted, the pain of stagflation could linger for several years unless major supply increases are put in place.

Bitcoin boom or bust

During the last week, Bitcoin and the cryptocurrency market they have generally come back under selling pressure. On the weekly chart, Bitcoin is down over 12%, dipping below the $21,000 levels at press time. Since Bitcoin shares a higher correlation with the US stock market, any decline on Wall Street is likely to affect Bitcoin equally. This would further lead to a knock-on effect on the entire crypto market.

At the same time, Satoshi Street remains divided on where Bitcoin will go next. The recent price correction in BTC has brought its price below the 200 week moving average (WMA) one more time. This shows that Bitcoin bulls are losing steam in the recent rally. Craig Erlam, Senior Market Analyst at Oanda, writes:

The rally that took it back to $25,000 has lost considerable momentum and that could start to weigh more on the price” of Bitcoin. “A move below $22,500 may suggest the rally has run its course for now.

Some analysts expected that in the event of a recession, BTC would possibly hit a low of $10,000. This means another 50% correction from current price levels. According to Galaxy Digital CEO Mike Novogratz, there is also a lack of institutional participation in the market.

On the other hand, Anthony Scaramucci, CEO of Skybridge Capital, has established a long-term bullish case for Bitcoin. Scaramucci recently stated that Bitcoin may hit $300,000 levels in the next six years.

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