Bank of America CIO Says Bitcoin Investments Signal A Looming Recession

The rising Bitcoin price could signal a looming 2019 recession, according to Bank of America CIO

The chief investment officer at Bank of America Merrill Lynch, Michael Hartnett, has recently caused a bit of a stir. Specifically, Hartnett has come out and said that the recent rise in the price of Bitcoin is a sign of a looming recession.

Rising crypto prices indicate a looming recession 

This news came in a fresh Business Insider report. In it, Hartnett detailed how investors have recently been flocking to Bitcoin and cryptocurrencies. This is evident by the recent rise in the price of Bitcoin, but Hartnett also suggested this is signaling a looming recession.

Nevertheless, Hartnett holds a somewhat controversial view of the reason for investors’ appetite for Bitcoin. In fact, Hartnett did not suggest, as some other observers have previously done, that investors’ reasoning for flocking to Bitcoin is mainly that it represents a “safe haven”.

Rather, Hartnett claimed that investors’ growing Bitcoin interest is due to it representing a high-risk, high-reward investment strategy. In addition to this, the low interest rates on bond yields experienced since 2008 have supposedly eroded profits.

Subsequently, Hartnett claims, investors have been forced to adopt a more greedy trading strategy. This has supposedly prompted investors to begin aggressively trading cryptocurrency, emerging markets, and corporate securities, in the hopes of capitalizing on the next crypto bull run.

Bitcoin and other cryptocurrencies could shelter investors from macroeconomic downturns

In addition to this, Hartnett also notes that investors are now increasingly investing in cryptocurrencies, and specifically Bitcoin. Moreover, this is supposedly due to an impending economic recession. 

Nonetheless, Bitcoin and other cryptocurrencies could represent a safe investment haven during an economic downturn. It would seem that investors are increasingly acknowledging this, and are beginning to take cryptocurrency investment precautions against a market slowdown.

This is not the first time a prominent investor has acknowledged the advantages held by cryptocurrencies during a market crash. Earlier this year, JPMorgan’s head of cross-asset fundamental strategy, John Normand, expressed a similar sentiment.

Moreover, Normand also stated that Bitcoin’s price made more sense when viewed in a “dystopian market” context.

“We have long been skeptical of cryptocurrencies’ value in most environments other than a dystopian one characterized by a loss of faith in all major reserve assets (dollar, euro, yen, gold) and in the payments system.“

As the ongoing trade war between the US and China continues to rage on, uncertainty in the markets does seem likely. It remains to be seen what effects this has on the price of Bitcoin.

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