Bank of America: Crypto Can Outperform Stocks Amid Potential Fed-Propelled Recession

According to Michael Hartnett, BofA chief investment strategist, Bitcoin and other cryptocurrency could outperform stocks and bonds in a possible recession. He argued in a recent note that the US Federal Reserve’s latest policy could lead the country and the rest of the world to such an economic condition.

Is Crypto Going to Bloom in the Face of Recession?

The US central bank made a change in 2022 after years of trying to combat the effects of the COVID-19 pandemic by enhancing its balance sheet. It now stands at $9 trillion. The Fed decided to reduce its balance sheet after having more than doubled it since March 2020. Some reports suggest that it could soon lose up to $95billion per month.

Reuters cited a note by the Bank of America’s strategists and reported that the “macroeconomic picture is deteriorating quickly” and could cause a recession in the world’s biggest economy.

Hartnett warned bank clients by using strong words such as “inflation shock worsening”, rates shock just beginning, and recession shock coming” that most assets would experience extreme volatility. However, stocks and bonds will perform better than others.

The bank actually backed several horses that came out on top in the possible recession: cash, commodities and, most importantly, cryptocurrencies.

Bank of America Building. Source: FinancialExpress

How does Crypto work?

It may be surprising to those who are closely following the cryptocurrency industry and Wall Street’s general approach toward it that BofA chooses digital assets as top performers. It wasn’t that long ago that BofA and many other banks took frequent jabs at bitcoin and the entire industry.

We won’t talk about the heart-pumping moments at JPMorgan, Goldman Sachs and Citigroup. Let’s concentrate on Bank of America.

BofA declared that bitcoin was highly volatile after years of neglecting the asset class.

The summer of 2021 came and reports surfaced that the bank had established a cryptocurrency research group. When it was revealed that BofA had launched a Bitcoin futures trading platform, the change-of-tune emotions intensified.

In October 2017, the bank made a complete turnaround, half a year after bashing Bitcoin. BofA researchers referred to BTC as “important” in a separate paper that was focusing on digital assets at the time.

The bank has also praised other networks and native coins since then, like Chainlink and Solana.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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