CRYPTO BENEFITS FROM CRISIS ACCORDING TO BANK OF AMERICA

Bank of America is talking about the possibility of a recession, emphasising the change in sentiment around the economy in general, with a possible winner that, according to the important US bank, should be the crypto sector, which could guarantee better performance than the equity sector.

This statement is most welcome considering its provenance, a bank that has never been too soft on the digital sector.

Bitcoin and other cryptocurrencies could outperform bonds and equities in a potential recession, said Michael Hartnett, chief investment strategist at BofA.

In a recent note, he argued that the US Federal Reserve’s new policy could drive the country and most of the world into such an economic state.

The US Central Bank changed its stance in early 2022.
This means that after more than double its balance sheet since March 2020 as a result of the effects triggered by the pandemic, the Fed has decided to start reducing it, with some reports suggesting that it could soon shed assets of up to $95 billion a month.
According to analyses provided by the US Bank, “the macroeconomic picture is deteriorating fast” and could lead to a recession for the world’s largest economy.

Bitcoin and cryptos could be the counterbalance to this doom-and-gloom scenario, particularly in a situation of persistent inflation, if they could free themselves from the still strong correlation with the equity sector.

The genesis of BofA’s approach to the crypto sector has its origins in March 2021 when an initial report by its analysts reported that bitcoin is highly volatile, making it “impractical as a wealth store or payment mechanism”.
From total disregard to analysis, then the first step.
A few months after the report and in the middle of the summer of 2021, the bank had set up a cryptocurrency research team. This was followed by the launch of a Bitcoin futures trading service, to conclude, six months after the negative reviews, with a new report where it called BTC “important” by referring to the whole sector as “too big to ignore”.

Now they are almost referring to the digital sector as a lifeline and a store of value!