A recession could prove a boost to the cryptocurrency industry in the US according to a chief investment strategist.
Written by Alex, senior CGN journalist[2 mins read]
The Bank of America (BoA) has acknowledged that a US Federal Reserve recession in the US may prompt more people to switch to cryptocurrencies.
BoA chief investment strategist Michael Harnett made the observation in a note released recently outlining fears over a possible recession.
There is growing concern that the Federal Reserve may begin to rapidly shed assets, potentially as much as $95bn every month.
Currently, the Feds’ balance sheet sits at $9 trillion and it has doubled since the beginning of the covid-19 pandemic in 2020.
Reuters recently said that this is another indication that the “macro-economic picture is deteriorating fast”, warning of rising inflation worldwide.
Harnett was in line with these comments, arguing that the nadir of the economic slowdown is yet to come, and talked about inflation becoming much worse with rates raising rapidly.
The bank then went on to predict what may end up doing well if a potential recession begins. Of all things, it also named cryptocurrencies as a possible “big winner”.
Bank of America has mostly ignored Bitcoin fearing it as an unstable and impractical currency or a vessel of storing wealth for the most of 2020.
Then, in 2021, reports emerged that the bank is actually rapidly switching its stance and is setting up a crypto dedicated unit.
This could signal a growth of confidence in the future of these currencies and how they would fair in a Federal Reserve-driven recession as confirmed by the Bank of America.
Meanwhile people have been using crypto recreationally at sites such as 1xBit, FortuneJack, and Bitcasino.io.