By CCN: The sudden swell of Bitcoin’s price to $8,000 USD this year shows global recession fears are mounting. This according to Michael Hartnett, the chief investment strategist at Bank of America Merrill Lynch.
Bitcoin price has doubled in 2019 but the rally is only getting started. | Source: Shutterstock
Interestingly enough, Hartnett says global investors are investing in bitcoin not because they see it as a safe haven asset in times of instability but because they are seeking high-risk, high-reward investments. He argues the effect of low-interest rates since 2008 on bond yields has left investors starved of profits, sending them into a global “greed trade” across corporate, emerging market, and crypto securities.
Bitcoin’s Price Streak Is Actually a Bit Alarming
Hartnett says investors are afraid of losing their savings in an imminent recession and seeking high returns to shore up their wealth. If major global investors that used to invest in bonds, the safest assets in the world, have jumped ship to swim for bitcoin — the ponzi scheme currency of lunatics, hackers, scammers, criminals, misfits, and the hopelessly naive — how bad do the world’s big players know things are? Terrifying.
Bitcoin is back up near $8,000. | Source: Shutterstock
Bitcoin proponents should pause the victory lap for a moment and let it sink in how weird this is. Regular-ish, everyday-ish people with deep pockets who used to buy investments like bonds are now investing like all the fringe lunatics. That is a massive and very sudden collapse of confidence in the world’s governments and the basic structure of the financial system. This could be some fall of the Roman Empire level phenomena unfolding before our very eyes in real time.
JPMorgan: Bitcoin’s Price Only Makes Sense in a Dystopian Environment
Earlier this year John Normand, JPMorgan’s head of cross-asset fundamental strategy, said in a research note: