JPMorgan chief issues “hurricane” warning; will Bitcoin stand the challenge?

Key Takeaways:

  • JPMorgan chief warns investors an economic storm is underway.
  • Rising oil prices and the raging war in Ukraine will send ripples across the global economy, says Jamie Dimon.
  • Bitcoin (BTC) could be hit by the "hurricane."
JPMorgan, JPMorgan chief issues “hurricane” warning; will Bitcoin stand the challenge?
image from medium.com

YEREVAN (CoinChapter.com) – Jamie Dimon, the chief executive of financial giant JPMorgan Chase said he is preparing his bank for an “economic hurricane” and suggested investors do the same. He also asserted that JPMorgan would take the “conservative” route with its balance sheet in turbulent times.

JPMorgan says a storm is underway.

Dimon mentioned several aspects of quantitative easing programs “backfired,” including negative rates. However, the upcoming “hurricane’s” primary focus was the war in Ukraine and the related spikes in oil prices.

Wars go bad, [they] go south in unintended consequences. […]We’re not taking the proper actions to protect Europe from what’s going to happen to oil in the short run […] as oil prices could potentially hit $150 or $175 a barrel.

added Dimon.

Also read: Does buying Grayscale Bitcoin Trust (GBTC) make more sense than BTC?

Moreover, Dimon’s warning comes on the back of the Federal Reserve implementing its quantitative tightening (QT) policy to fight the growing inflation. Supply chain disruptions due to the pandemic exacerbated the price increases and the worries that the Fed might tip the economy into recession as it combats inflation.

We’ve never had QT like this, so you’re looking at something you could be writing history books on for 50 years.

mentioned the JPMorgan chief.

Will the “hurricane” hit crypto?

However, the economic “hurricane” might also devastate the crypto market. In detail, in times of uncertainty, investors tend to take the conservative route, as JPMorgan stated. Thus, the stock market suffers losses in a risky asset class while traders flock to sanctuary assets or the strengthening greenback.

Bitcoin has been displaying a strong correlation with risk-on assets. So if the storm hits the equity market, it is likely to rage through the digital assets as well, starting with BTC. In the meantime, the alpha crypto traded at just over $30,200 on June 2.

Bitcoin (BTC) correlation with S&P500 (SPX). Source: TradingView.com
Bitcoin (BTC) correlation with S&P500 (SPX). Source: TradingView.com

Also read: Bitcoin to $20K likely as Fed minutes show more aggressive rate hikes.

Moreover, reversing the Fed’s money printer could drive Bitcoin further into the bear market. The Fed plans to shrink its balance sheet by $47.5 billion per month for the current quarter. Additionally, investors should see a $95 billion reduction in September and a total $7.6 trillion cut by the end of 2023.

Digital asset newsletter author under the pseudonym CryptoWhale also commented on QT’s effects on Bitcoin. In early May, the analyst forecasted a BTC “mega crash” if the Fed implemented the planned QT rate.

Also read: SHOCKING! Quantum computing’s growth could leave Bitcoin blockchain vulnerable to hacks.

The future fluctuations of volatile assets like Bitcoin are hard to foresee. However, the “hurricane” Jamie Dimon referred to might have rippling repercussions across the broader economy. Thus, it could also hit Bitcoin as well, trickling down to the altcoin market.

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JPMorgan, JPMorgan chief issues “hurricane” warning; will Bitcoin stand the challenge?

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