JPMorgan Strategist Warns of Collapse in the Crypto Market

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JPMorgan senior strategist David Kelly has said crypto investors will suffer huge losses as the Fed raises the key rate and ends the era of “crazy speculation.” He has said:

“At a certain stage, I expect a strong decline in the prices of digital assets. They are vulnerable to monetary tightening.”

The expert has compared cryptocurrencies to “magic powder.” The interest in them arose due to the stimulating policy of the Fed, which forced investors to switch from bonds that do not bring anything to more risky assets. He has explained:

“If real interest rates return to the positive zone, you will deprive yourself of crazy ideas about cash and direct funds to projects with real economic returns. Anything highly valued will be vulnerable if the Fed gets aggressive early on.”

Jerome Powell, the chairman of the Federal Reserve, has not ruled out an increase in the key rate in March by 50 basis points. He has also allowed monetary tightening at every meeting.