Run away from bitcoin and other cryptocurrencies, and buy value stocks! This is essentially what JP Morgan bank recommended to investors in a research note.
David Kelly, the chief strategist of JP Morgan Asset Management advised investors to invest in value stocks and sell cryptocurrencies, specifying in particular to stay away from bitcoin, and base his opinion on the fact that the Fed will continue to weigh down the markets with an aggressive tightening of its monetary policy.
Sell Bitcoin and buy value stocks, JPM advises
“The Federal Reserve is overestimating the strength of the US economy because it feels guilty that inflation has risen on their watch,” he said.
Recall that the cryptocurrency market was clearly affected after Fed Chairman Jerome Powell said that the central bank would continue its aggressive campaign to raise interest rates at the Jackson Hole conference last week.
On Monday, Minneapolis Federal Reserve Chairman Neel Kashkari added to hawkish market prospects by saying he was “pleased” with the market’s fall after Powell’s intervention, meaning investors understand the Fed is fully committed to aggressive monetary policy. to maintain.
In this context, JP Morgan believes that we should expect a further increase in market volatility in general, and foresees a high probability of a recession, advising to buy defensive stocks as well as long-term bonds, while we stay away from cryptocurrencies like BTC.
The strategist advised investors to sell cryptocurrencies, citing Bitcoin by name, and balancing large-cap technology stocks.
Most Cryptocurrencies are “Junk”.
Note that these pessimistic remarks from David Kelly are consistent with other comments made this week by another JP Morgan official, Umar Farooq, who heads the bank’s digital assets unit.
In a panel discussion at the Monetary Authority of Singapore’s Green Shoots Seminar on Monday, he said:
“Most of the cryptocurrencies are still really garbage, I mean, except for, let’s say, a few dozen tokens, the other thing mentioned is noise or frankly, it’s going to evil.”
“Use cases have not fully emerged, and the regulation has not caught up,” he said, adding that the cryptocurrency industry is not yet mature enough to be used on a large scale for massive transactions between financial institutions.
He explained that the current cryptocurrency market is essentially speculative:
“You have to mature all these things so you can do things with them. Right now, we’re not there yet, most of the money used in Web3 today, in the current infrastructure, is for speculative investment.”
Bitcoin fair value at $38,000
Finally, to contrast the negative statements for cryptocurrencies above, it will be recalled that JP Morgan, and more precisely its analyst Nikolaos Panigirtzoglou, estimated earlier this year that the fair value of bitcoin is $38,000, a prediction of a price that has since been very supported in respect. the target is almost double the current price.
The bank wrote at the time that BTC could rally stronger than other assets, as it fell much deeper during this year’s correction period.
She added that cryptocurrency is one of her favorite alternative assets to real estate, and that it doesn’t fall into the same category as stocks and bonds.
Do you also think that Bitcoin is currently worth much less than it should be? Then you should familiarize yourself with the different ways to buy Bitcoin!