JPMorgan Strategist: Sell Bitcoins, Crypto After Hawkish Fed

The crypto market neared crucial support levels on Fed’s hawkish chorus after a brief reprieve from June lows.

A firmer stance against inflation is being taken by the US Federal Reserve, which has dismissed discussions about a softer monetary policy. David Kelly, JPMorgan’s chief global strategist, has some suggestions for crypto investors worried about the market’s direction.

In an interview Friday following Fed Chair Jerome Powell’s speech at Jackson Hole, Wyoming, Kelly said it is best to focus on valuations now rather than look at short-term directions.

There is one foot in a recession and one foot on a banana peel in the current economic climate. Stocks with low price-to-earnings ratios, as well as the US and international value, should be overweighted.”

Sell Bitcoin and Crypto

Since the beginning of the year, both the traditional and crypto markets have experienced significant declines due to fears of tighter monetary policies to combat inflation, which has reached the highest levels in forty years. As a result, the economy is gradually slipping into recession. 

In response to Powell’s recent remarks that interest rates may need to remain high in order to contain inflation, Bitcoin briefly fell below $20,000 for the first time since mid-July, as risk appetite waned. Kelly advises investors to avoid large-cap tech stocks, Bitcoin, and cryptocurrency in general. He anticipates increased volatility and a high risk of a recession. 

Risk-On Assets to Continue Struggling

Many experts believe risky assets will continue to struggle as Powell fights inflation with a restrictive monetary policy. According to Edward Moya, senior market analyst at Oanda, in a recent email, this aggressive approach may also cause an economic slowdown.

” Bitcoin fell as Fed Chair Powell reiterated that tightening policy would reduce inflation. Risky assets are under pressure as Powell continues to fight inflation aggressively, even though it will cause an economic slowdown.” 

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