chief global strategist at JPMorgan Asset Management David Kellyclaimed in an interview with Business Insider that crypto market investors will face “big losses”:
“I expect to see big losses in crypto at some point because there is nothing there.”
Kelly sees the US Federal Reserve’s upcoming interest rate hikes as the main bearish catalyst for the cryptocurrency market. According to the analyst, a hawkish Fed will put an end to the speculative frenzy on the rise in 2021.
The analyst also believes that the central bank could potentially catch investors off guard by raising interest rates more decisively than expected.
Citigroup Economists recently predicted that the Fed will raise interest rates by 50 basis points this March due to high inflation. The consumer price index (CPI) recorded an annual increase of 7.2% last month, the fastest increase in four decades. This popular inflation benchmark has led many analysts to believe the Fed will step up its hawkish stance.
According to Kelly, due to rising interest rates, money will flow into projects with “real economic returns” rather than “crazy ideas”. Feds monetary policy was seen as the main reason behind the recent cryptocurrency rally.
leading cryptocurrency bitcoin and Ethereumfell 36.75% and 36.94%, respectively, from their record levels in early November. However, Kelly said the decline is not over yet, arguing that digital assets are in particular danger as they serve no purpose.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.