The prices of bitcoin and several other digital currencies have fallen yet again, with the world’s number one virtual asset now trading below $30,000 for the umpteenth time this year. Jamie Dimon – the man behind JPMorgan, one of the world’s biggest financial institutions – has announced that all hell is going to break loose in the U.S. economy.
Jamie Dimon Is Worried About the Economy
According to Dimon, the Fed is going to be implementing new methods to tighten the economy. This will control market volatility and inflation, he says, but things could ultimately backfire and cause people’s investments – including digital currencies, stocks, and precious metals – to travel in a whirlwind. At a recent conference, he stated:
You better brace yourself. JPMorgan is bracing ourselves and we’re going to be very conservative with our balance sheet.
The Federal Reserve currently has a $9 trillion balance that it’s looking to reduce. This number came about during the coronavirus pandemic as the government issued spending and stimulus measures designed to keep people afloat during what has largely become one of the worst economic periods in not just American, but global history.
In addition, the Fed says it’s going to be hiking rates again as a way of controlling inflation. The move will make it harder for anyone looking to purchase a car, home, or anything else that often requires payments over time to get the money they need for common survival tools.
Dimon commented:
[The Fed doesn’t] have a choice because there’s so much liquidity in the system. They [need] to remove some of the liquidity to stop the speculation, to reduce home prices and stuff like that. And you’ve never been through quantitative tightening.
Throughout the year, economic turmoil has prevailed. The stock market has continued to fall into the doldrums, and many digital currencies – which were trading at new all-time highs during the final months of 2021 – have seen all the previous year’s gains vanish over the scope of just a few weeks. Dimon said:
I said they’re storm clouds. They’re big storm clouds here. It’s a hurricane, [and] that hurricane is right out there down the road coming our way. We just don’t know if it’s a minor one or Superstorm Sandy.
Several analysts are also talking about the recent crypto crash and say it represents some ugly economic winds that are likely coming our way. Alex Kuptsikevich – a senior market analyst with FX Pro – said:
Bitcoin fell sharply in the U.S. session on Wednesday along with stock indices, following a strong ISM Manufacturing PMI release. The data raised expectations of the Fed monetary policy tightening.
It’s Just Been One, Long, Negative Streak
Sam Kopelman of Luno fame also stated:
Crypto’s trajectory in May has been shaky to say the least following the Luna collapse, coupled with general turmoil in the financial markets.
Source: https://www.livebitcoinnews.com/jamie-dimon-cryptos-latest-fall-is-a-sign-for-things-to-come/