The Bitcoin Prize could go in both directions if dimon's recession warnings come true (opinion)
The Bitcoin Prize could go in both directions if dimon's recession warnings come true (opinion)
economic, financial and corporate analysts have been looking for an upcoming recession since the end of 2022. The only question in a field of certainty that a slight recession threatens is where?
Jamie Dimon: Banking breakdowns could lead to a recession in 2023
Will the recession emerge from a financial crisis? Will oil or another raw material trigger it? Could it start as with the large recession in housing construction? The critical weakness of the banking system, which became clear to the markets in the first quarter of this year, indicates that it could start with a meltdown.
The IMF warned this week of "shadow banks" or financial companies that are not banks and also endanger financial stability. Jamie Dimon, long -time CEO of JPMorgan Chase and Co, recently warned in a letter that it will not be like in 2008, but the next recession will take years:
"While I am writing this letter, the current crisis is not over yet, and even if it is behind us, it will continue to have an impact. But it is important that the latest events have nothing to do with what happened during the global financial crisis in 2008 (of which regional banks were hardly affected)."
If Dimon is right and the economy is more likely to be in a recession, this could be a macroeconomic headwind. The Bitcoin price could encounter unstoppable resistance until the cycle reverses. But it could be a tailwind for Bitcoin. It only depends on how the disorders in the economy are overcome.
recession: headwind or tailwind for the Bitcoin price?
A recession this year could easily put an end to the Bitcoin price rally. In addition, a decline in economic growth could push down the price and pull the entire crypto sector down with the financial markets. This would correspond to the trend of the Bitcoin tech share correlation, and investors would easily do without risk in a recession.
However, it is possible that a sufficiently mild recession with certain characteristics could give Bitcoin some tailwind. In a recession, the FED would rather reduce interest rates with increasing probability to boost growth. In search of returns, this could send this into the cryptoma markets after the loan rates have been reduced.higher tradfi interest rates could be exactly the impetus that some institutional investors need who dipped their toes in the crypto waters to immerse themselves and to search for alpha for their portfolios. It is a beautiful new world that is constantly changing, so it has never been so true that past results are not a guarantee for future services.
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