{"id":59896,"date":"2022-04-11T10:44:26","date_gmt":"2022-04-11T07:44:26","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=59896"},"modified":"2025-09-05T00:31:11","modified_gmt":"2025-09-04T21:31:11","slug":"bank-of-america-flags-bitcoins-potential-as-a-hedge-against-a-stock-market-downturn","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/bank-of-america-flags-bitcoins-potential-as-a-hedge-against-a-stock-market-downturn\/","title":{"rendered":"Bank of America flags Bitcoin’s potential as a hedge against a stock-market downturn"},"content":{"rendered":"

Commodity assets, cash and cryptocurrencies may show favorable dynamics relative to stocks and bonds against a backdrop of inflation shocks, a recession and policy by the the Fed<\/span>. Bank of America strategist Michael Hartnett arrived at such conclusions, according to Business Insider<\/a>.<\/p>\n

Investors in the equity market should prepare for the S&P 500 to fall below 4,000 by the end of 2022, implying a drop of about 11% from current levels.<\/p>\n

According to the analyst, with consumer demand rebound, persistent supply-chain frictions and the war in Ukraine, inflation has \u201cgotten out of control,\u201d reaching 40-year highs.<\/p>\n

\n

\u201cInflation will trigger a recession. Almost all such episodes in the past have been preceded by it [\u2026]. Expectations of higher yields [in the government debt market] and a weaker dollar heightened the likelihood of a downturn,\u201d<\/em> \u2014 Hartnett said.<\/p>\n<\/blockquote>\n

He warned that the inflation shock would be followed by a rate-hike shock and then a recession shock.<\/p>\n

Minutes of the March FOMC meeting<\/a> reflected policymakers\u2019 readiness to begin shrinking the balance sheet by $95 billion a month from May, which would almost double the pace of tightening seen in 2017\u20132019. By the end of 2023, the balance sheet could fall from the current $9 trillion to $6.5 trillion. Committee members also signaled they were ready to lift the federal funds rate by 0.5 percentage points in one go.<\/p>\n

Such actions would amplify volatility and push yields on government bonds higher, the expert concluded.<\/p>\n

\n

\u201cQuantitative easing<\/a> supported asset prices. Quantitative tightening<\/a> will have the opposite effect. The [new] era of delayed hawkish Federal Reserve policy begins with an overvalued stock market\u201d<\/em>, \u2014 the report says.<\/p>\n<\/blockquote>\n

In such circumstances, cash, commodities and cryptocurrencies may display a more favorable dynamic relative to stocks and bonds.<\/p>\n

As noted, Bloomberg strategist Mike McGlone previously forecast Bitcoin to reach $100,000 in 2022<\/a>.<\/p>\n

Earlier, analyst and head of Factor LLC Peter Brandt suggested that the bear market in Bitcoin would last until May 2024<\/a>.<\/p>\n

Subscribe to ForkLog news on Telegram: ForkLog Feed<\/a> \u2014 the full news stream, ForkLog<\/a> \u2014 the most important news, infographics and opinions<\/p>\n","protected":false},"excerpt":{"rendered":"

Commodity assets, cash and cryptocurrencies may show favorable momentum relative to stocks and bonds amid a confluence of inflation shocks, recession and Federal Reserve policy. Bank of America strategist Michael Hartnett arrived at such conclusions, according to Business Insider.<\/p>\n","protected":false},"author":1,"featured_media":59897,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[2027,1269,1138],"class_list":["post-59896","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bank-of-america","tag-cryptocurrencies","tag-opinions"],"aioseo_notices":[],"amp_enabled":true,"views":"50","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/59896","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=59896"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/59896\/revisions"}],"predecessor-version":[{"id":59898,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/59896\/revisions\/59898"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/59897"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=59896"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=59896"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=59896"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}